Euro Zone business growth slips in December

Euro zone business growth slowed more than expected this month as renewed restrictions imposed to curb the Omicron coronavirus variant curtailed the recovery in the bloc's dominant services industry, a survey showed on Thursday.

Europe is facing a fourth wave of infections and many governments have been encouraging citizens to stay home and avoid unnecessary social contact.

IHS Markit's Flash Composite Purchasing Managers' Index, a good indicator of overall economic health, dropped to 53.4 in December from 55.4 in November, its lowest since March and below the 54.0 predicted in a Reuters poll.


That headline number was dragged down by the services PMI, which sank to an eight-month low of 53.3 from 55.9. While above the 50-mark separating growth from contraction it missed the Reuters poll estimate for 54.1.

"The renewed decline in the Composite PMI in December suggests growth slowed to a crawl as tighter restrictions and growing consumer caution are taking their toll on economic activity, with the service sector bearing the brunt," said Michael Tran at Capital Economics.

Growth in demand for services dropped to its lowest since April with the new business index falling to 52.6 from 54.2. Reuters