Investing.com - Private sector activity in the euro zone rose in
December, data on Monday showed, indicating stronger growth in the
euro area, but the rate of decline in France accelerated, raising
concerns that the country could fall back into a recession.
The euro zone's composite output index rose to a three month high
of 52.1 in December, from 51.7 in November, indicating that
European Central Bank policymakers will not need to step up
stimulus measures. It was the fastest increase since April 2011.
New orders picked up to the highest level since mid-2011, fuelling
optimism that the recovery in the region will carry forward into
the start of 2014.
Rising exports helped push the euro zone's manufacturing purchasing
managers' index up to a 31 month high of 52.7 in December, from a
final reading of 51.6 in November and above expectations for a
reading of 51.9.
However, the rate of expansion in the service sector ticked down to
a four month low as domestic demand remained weak. The euro zone
services PMI declined to 51.0 from 51.2 in November. Economists had
expected an increase to 51.5.
The report said the PMI is signaling gross domestic product
expansion of just 0.2% in the fourth quarter, indicating that the
recovery in the euro area remains fragile.
Private sector output in the euro zone's largest economy continued
to expand steadily in December, with Germany's manufacturing PMI
rising to a 30-month high of 54.2 from 52.7 in November, well above
expectations for a reading of 53.0.
Germany's service sector expanded at slightly slower pace this
month, with the services PMI ticking down to 54.0 from 55.7 in
November, compared to expectations for a decline to 55.5.
A separate report showed that the contraction in France's
manufacturing and service sector deepened in December.
France's manufacturing PMI fell to a seven month low of 47.1 from
48.4 in November, while the services PMI dropped to a six month low
of 47.4 from 48.0 last month.
The weak data raised concerns that the French economy could post a
second successive quarterly decline in the three months to
December, after a contraction of 0.1% in the third quarter, which
would push the country back into a recession.
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