Eurozone business activity picks up again in January: PMI

Business activity in the euro zone returned to growth in January, according to a survey that suggested the bloc’s economy could again escape a contraction this quarter and that the recovery could accelerate.

In the final quarter of 2022, the euro zone managed to avoid a recession as Gross Domestic Product expanded by 0.1%, Eurostat data showed on Tuesday, beating expectations in a Reuters poll for a 0.00 drop. 1%.

The S&P Global Composite Purchasing Managers’ Index (PMI), seen as a good indicator of overall economic health, rose to a seven-month high of 50.3 last month from 49.3 in December. , just below the preliminary reading of 50.2.

January was the first month the index has been above the 50 mark since June.

“A pick-up in business output growth, even marginal, is welcome news and suggests the eurozone can escape a recession,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

“With price pressures falling sharply in recent months, supply constraints eased and near-term energy market concerns eased by subsidies, lower prices and a warm winter, business confidence has also risen, lifting prices. expectations that the recovery will materialize in the coming months,” he added.

While demand has fallen again, the new business index has moved much closer to break-even and, with businesses increasing optimism about the year ahead, it has reached an all-time high since April. The future production index jumped from 55.5 to 60.4.

Activity in the bloc’s services sector also returned to growth last month, with a modest recovery in demand. The services PMI rose to 50.8 from 49.8 last month, its first time above 50 since July.

Source: CNN Brasil

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