Latest data released by Markit - 16 December 2020
- Prior 41.7
- Manufacturing PMI 55.5 vs 53.0 expected
- Prior 53.8
- Composite PMI 49.8 vs 45.7 expected
- Prior 45.3
Despite concerns headed into the year-end, the euro area economy looks like it is defying the pessimism as it nears stabilisation in December. The manufacturing sector continues to carry a big chunk of that weight, with the print being the highest in 31 months.
Markit notes that:
"The eurozone economy is faring better than expected in December, the flash composite PMI coming in at 49.8, ahead of consensus expectations of 45.8. The data hint at the economy close to stabilising after having plunged back into a severe decline in November amid renewed COVID19 lockdown measures. The fourth quarter downturn consequently looks far less steep than the hit from the pandemic seen earlier in the year, though the picture is very mixed by sector.
"Companies have also become increasingly optimistic about the year ahead, with vaccine rollouts expected to help restore businesses to more normal trading conditions as 2021 progresses.
"However, while vaccines mean there's light at the end of the tunnel, the near-term still looks very challenging for many consumer-facing companies. Although manufacturing is reporting strong growth, fueled by rising exports and a booming performance from Germany in particular, the service sector remains in decline amid ongoing social distancing restrictions. Many of these containment measures look likely to remain in place for some time to come, constraining the economy as we head into the new year."
