Latest data released by Markit - 3 March 2021

  • Composite PMI 48.8 vs 48.1 prelim

The preliminary report can be found here. Slightly better revisions but they still just reaffirm a modest drop in euro area economic output last month to start the new year.

Tighter restrictions continue to weigh on the services sector in general, though the decline is somewhat offset by a stronger manufacturing sector performance. Nonetheless, this still sets the stage for a double-dip recession for the Eurozone economy in Q1.

Markit notes that:

"A fourth successive monthly drop in business activity puts the eurozone economy on course for a double-dip recession, though an easing in the rate of decline underscores how the latest downturn appears far less severe than the initial hit from the pandemic last year.

"While many hospitality-based companies in the service sector continue to struggle due to COVID-19 related restrictions, manufacturing is faring well and alleviating the overall economic impact of lockdown measures. Even some hard-hit parts of the service economy are showing greater resilience than last year, suggesting some adaptation to the constraints of social distancing.

"However, it's becoming clear that many virus-fighting measures will need to be in place for some time to come, in part due to the slow vaccine roll-out. This could extend the drag on the economy from the pandemic into the second half of the year and subdue the pace of recovery.

"A key question will be the extent to which these containment measures will limit the supply of goods and services at a time of recovering demand, as this will in turn determine pricing power in coming months and affect how long the current bout of sharply rising prices will persist."