Tide could be turning in Europe as services industry picks up pace
THE NEW year may be seeing a change in the economic fortunes of the Eurozone, new survey data shows.
Three of the largest four Eurozone nations registered service sector growth in January, according to Markit’s purchasing managers’ index (PMI) released yesterday.
In Germany, the services PMI climbed to 54.0 from December’s 52.1 with sentiment towards the business outlook reaching a 45-month high.
A PMI score above 50 signifies growth. “January’s survey results send positive signals all around, with service sector activity quickening and new orders returning to growth,” said Oliver Kolodseike, economist at Markit.
The Italian services PMI registered a 51.2, up from December’s 49.4. Despite the PMI being above 50, firms still reported net job losses.
Spain’s services PMI also improved. It reached 56.7 in January from 54.3 and marks the 15th consecutive month of expansion for the Spanish service sector. For the Eurozone as a whole, the service sector PMI reached 52.7 from December’s 51.6.
The odd one out was France, but an economist warned on taking too much from the data. The services PMI for France dropped to 49.4 in January from 50.6.
French service providers reported a 15th consecutive month of Job shedding despite new and outstanding business both increasing.
“We take French PMIs with a pinch of salt, as they tended to overstate the economic weakness in the past,” said economist Evelyn Herrmann from investment bank BNP Paribas.