Eurozone Private Sector Expands For First Time In Five Months

(RTTNews) - Eurozone private sector expanded for the first time in five months in January as factory production showed a slower decline amid a softer growth in services activity, final survey results from S&P Global showed on Wednesday.

The HCOB composite output index rose to 50.2 in January, in line with flash estimate, from 49.6 in December. The score signaled the first monthly increase in private sector activity since last August.

The services Purchasing Managers' Index dropped to 51.3 in January from 51.6 in December. The flash score was 51.4.

At composite level, output expanded in January despite an eighth successive fall in overall new business inflows. There was a marked decline in export sales, data showed.

Backlogged orders decreased for a twenty-second month in a row at the start of 2025, with both manufacturers and service providers clearing outstanding work.

Workforce numbers decreased marginally in January as job losses were confined to manufacturing.

Growth expectations of companies were at the strongest level since July 2024. Manufacturers were more bullish than services companies for the first time in three years.

Turning to prices, the survey showed an intensification of cost pressures in January. Input cost inflation rose to a 21-month high. In turn, firms raised their prices more aggressively.

National PMI data revealed that Spain was again the main growth engine of the single-currency market, although output grew at a weaker rate than at the end of 2024.

However, a key reason behind the broader upturn was Germany, which saw its best monthly performance since last May. Meanwhile, Italy's economy was again almost stagnant, and France logged a fifth successive contraction.

Germany's private sector increased slightly as stronger growth in services coincided with a reduced drag from falling manufacturing production. The HCOB final composite output index registered 50.5 in January, up from 48.0 in December. The flash score was 50.1.

The services PMI climbed to 52.5 in January from 51.2 in the previous month. The score signaled the fastest growth in six months and matched flash estimate. France's private sector output logged its fifth consecutive contraction in January. The final composite output index rose slightly to 47.6 from 47.5. The score was below the flash estimate of 48.3. Meanwhile, the services PMI dropped to 48.2 from 49.3 in December. The initial score was 48.9.

Italy's private sector remained fractionally inside contraction territory in January. The HCOB composite output index remained unchanged at 49.7. The services PMI ticked down to 50.4 in January from 50.7 in December.

Spain's private sector growth softened in January, reflecting a noticeable slowdown in manufacturing sector and weaker gains in service sector activity. The composite output index registered 54.0, down from 56.8. The services PMI dropped to 54.9 in January from 57.3 in December.