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Eurozone returns to growth.

 Activ­ity has unex­pec­tedly returned to growth for the first time since June, says an S&P Global sur­vey

Eurozone

likely to bol­ster ECB resolve to raise rates. S&P Global’s flash euro­zone com­pos­ite pur­chas­ing man­agers’ index, a meas­ure of activ­ity in man­u­fac­tur­ing and ser­vices, rose to 50.2 in Janu­ary from 49.3 in Decem­ber, fig­ures yes­ter­day showed. «A steady­ing of the euro­zone eco­nomy at the start of the year adds to evid­ence that the region might escape reces­sion,» said Chris Wil­li­am­son, chief busi­ness eco­nom­ist at S&P Global Mar­ket Intel­li­gence. Sup­ply chain stress has eased, and the reopen­ing of the Chinese eco­nomy has helped restore con­fid­ence in the broader global out­look for 2023.

The rise in the com­pos­ite euro­zone PMI index con­trasts with an unex­pec­ted deteri­or­a­tion in the UK, where the cor­res­pond­ing index sig­nalled the sharpest drop in activ­ity in two years. A resi­li­ent euro­zone eco­nomy coupled with high under­ly­ing price pres­sures and renewed momentum in the labour mar­ket rein­forced ECB sig­nals of fur­ther mon­et­ary tight­en­ing. The S&P PMI sur­vey, based on data col­lec­ted between Janu­ary 12 and 20, showed employ­ment growth picked up momentum as busi­nesses pre­pared for a bet­ter than expec­ted year. Busi­ness expect­a­tions have increased the most monthly since June 2020, push­ing con­fid­ence to its highest level since last May.

«Some­times you just need a bit of luck,» said Bert Colijn, senior eco­nom­ist at ING. The euro­zone had avoided «dra­matic scen­arios» for the winter after a mild Decem­ber in which the deple­tion of gas stores was far lower than feared. Activ­ity in the ser­vices sec­tor expan­ded for the first time since last July, and man­u­fac­tur­ing out­put registered the smal­lest fall since last June.

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Comments

  1. Adrian25 January 2023 at 11:50

    I don't really understand why the deterioration in the UK was unexpected? I mean, just look at the recent leaders the UK has recently had and the decisions they've made in the last few years. It was just a matter of time before the UK started suffering because of those people and their decisions.

    ReplyDelete
    Replies
    1. Sam25 January 2023 at 12:02

      Agreed. From the outside, this should have been clear. Brexit was a big mistake and on top of that it coincided with a huge pandemic which made things 100 times worse.

      Delete
    2. Liam S.25 January 2023 at 12:29

      The UK would be in a much better state if they didn't cut ties with the EU. A lot of people now realize that Brexit was a mistake. Some of them have voted for Brexit but since changed their minds.

      Delete
  2. Anonymous25 January 2023 at 13:11

    December was mild because the weather is changing, getting warmer which means we are in for some serious problems this summer. It was good for gas levels (since they didn't deplete) but this excessive warming of the planet is not good.

    ReplyDelete

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