Eurozone Services Ease to 4-month Lows: Markit
Eurozone services expanded at the slowest pace in four months, as manufacturing output continued to lead the currency bloc’s fragile and uneven recovery last month.
Markit Group’s gauge of Eurozone services fell from 51.2 to 51.0 in December, in-line with forecasts. A reading above 50.0 signals expansion, whereas a reading below that level indicates contraction.
Service sector business activity remained positive, although the pace of expansion continued to ease. Ongoing domestic weakness in some member-states continued to weigh down recovery toward the end of 2013, as high unemployment kept consumer activity at a stand-still.
Among member-states, Ireland registered the sharpest rate of business expansion, growing at a near seven-year record. Spain reported the strongest pace of service sector growth in more than six years, while German services expanded at a slower pace than the previous month. Meanwhile, France and Italy continued to contract, with the rate of growth similar to the previous month.
The PMI data indicated that Eurozone recovery “gained further traction at the end of last year,” largely due to the “second-largest increase in business activity since June 2011,” said Chris Williamson of Markit.
The Eurozone Composite Index, which also factors business activity in the manufacturing industry, rose 0.4 percentage points to 52.1. New orders and a growing export market helped keep manufacturers busy in December, nearly offsetting the sluggish service economy. Fourth quarter PMI data suggests the Eurozone economy expanded a mere 0.2 percent in the final three months of 2013.
Service providers remained optimistic about their economic prospects in 2014. Positive sentiment reached its highest level since mid-2011. Sentiment was broadly lower in Germany, but remained strong in Ireland and Spain, and increased in France and Italy.
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