A further contraction in economic activity in the euro zone was recorded in December, except that it was less severe than in October and November, thanks to the fall in inflation, according to the Flash PMI index published yesterday by S&P Global.
The index, calculated on the basis of business surveys, recovered slightly to 48.8, following 47.8 in October. Despite everything, activity in the private sector contracted for the sixth consecutive month.
A figure lower than 50 signals a decline, a figure beyond signifying, on the contrary, an increase in activity.
The data collected still suggests “a quarterly decline in GDP of 0.2%” in the euro zone over the last three months of the year and a further decline from January to March 2023, noted the chief economist of S&P Global, Chris Williamson.
“While the new decline in activity recorded in December confirms the very high probability of a recession, the latest data suggest, however, that it will be less severe than anticipated a few months ago”, he underlined.
He said the outlook for inflation is becoming “much more favourable” thanks to improved supply chains that are helping to dampen rising business costs.
The European situation is marked by a deterioration in the economic situation in France at a time when it is improving in Germany.
France is the only country in the eurozone where the contraction in activity accelerated in December, with the PMI index falling from 48.7 to 48, which represents “the strongest contraction since November 2012, excluding pandemic months.
In Germany, on the other hand, the index recovered, rising from 46.3 in November to 48.9 in December, the leading European economy taking full advantage of the upturn in the manufacturing sector.
APS