LONDON (Reuters) – Euro zone business began the new year with a modest return to growth as stable services activity in January was complemented by an easing of the long-running downturn in manufacturing, a survey showed.
HCOB’s preliminary composite euro zone Purchasing Managers’ Index, compiled by S&P Global, rose to 50.2 in January from December’s 49.6, nudging just above the 50 mark separating growth from contraction.
A Reuters poll had predicted a small shift to 49.7.
An index measuring the bloc’s dominant services industry dipped to 51.4 from 51.6, but remained above breakeven and was just below the Reuters poll forecast for 51.5.
Suggesting there won’t be any big rebound soon, demand growth remained tepid. The new business index rose to 50.7 from 50.2.
The downturn in manufacturing activity, which began in mid-2022, eased and its headline PMI jumped to 46.1 from December’s 45.1. The Reuters poll had predicted a shallower lift to 45.3.
An index measuring output which feeds into the composite PMI remained sub-50 but soared to 46.8 from 44.3, its highest reading in eight months.
While manufacturers faced rising costs for raw materials they kept the prices they charged steady. The input prices index rose to a five-month high of 51.6 from 50.0.
Adding to the idea firms are not expecting an imminent big upswing in activity they cut headcount in January, albeit only mildly. The composite employment index rose to 49.8 from 49.2, just shy of breakeven.
(Reporting by Jonathan Cable; Editing by Toby Chopra)
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