Private sector activity rebounds to growth

Private sector activity in the eurozone rebounded to growth in January after four consecutive months of contraction, a key survey showed yesterday, as Germany and France both expanded.

The flash reading of the purchasing managers’ index (PMI), compiled by Markit research firm, for the eurozone jumped to 50.4 points from 48.3 points in December.

Any score in the survey of 4,500 manufacturing and services firms above 50 indicates growth, while a score below indicates contraction. The flash reading is based on about 85 per cent of total replies.

“Output rose at a robust pace in Germany, which saw the largest increase for seven months, and a modest expansion (the first growth for four months) was also reported in France,” Markit said in a statement.

France’s composite score rose to 50.9 points, its highest reading in five months, from 50 in December.

“In contrast, output continued to fall across the rest of the region as a whole, dropping for the eighth consecutive month,” said Markit, adding that the rate of contraction was the weakest for four months. The eurozone reading for services soared to 50.5 points in January, a five-month high, from 48.5 points in December.

Eurozone manufacturing still showed a contraction in January at 48.7 points, but had jumped from 46.9 in December, and was also at a five month high.

‘Eurozone manufacturing output climbed to 50 points in January’

Eurozone manufacturing output climbed to 50 points in January, a six-month high, from 47.1 points in December.

“The eurozone economy appears to have stabilised in January, showing a marginal increase after a 0.5-0.6 percent contraction in gross domestic product in the final quarter of last year, according to flash Markit PMI,” Markit Chief Economist Chris Williamson was quoted as saying.