Euro zone business growth 'stays weak' in December

Euro zone business growth remained weak in December, with tepid foreign demand exacerbating a contraction in manufacturing and offsetting a slight pick-up in services activity, although some analysts saw signs of stabilization, according to Reuters.

IHS Markit’s Euro Zone Composite Flash Purchasing Managers’ Index (PMI), are thought to be a good guide to economic health, stayed at 50.6 in December, a touch below a median 50.7 predicted in a Reuters poll. Anything above 50 indicates growth.

The private sector business report published on Monday suggests the risks to the euro zone outlook remain skewed to the downside, despite Christine Lagarde’s more upbeat tone in her first news conference as head of the European Central Bank.

The euro zone’s industrial sector has struggled throughout the year, with manufacturing activity contracting for the 11th month in a row in December. The factory PMI fell to 45.9 from 46.9, below the 47.3 predicted in a Reuters poll.

The bloc’s dominant service industry grew a bit faster, however, with that PMI rising to a four-month high of 52.4 from 51.9, above the 52.0 predicted in a Reuters poll.