The Eurozone downturn eased further at the end of the 2012, as rates of contraction in economic output and new business slowed. At a nine-month high of 47.2 in December, the Markit Eurozone PMI® Composite Output Index was nonetheless weaker than the earlier flash estimate and below the 50.0 no-change mark for the eleventh successive month.
The average reading for the headline index over Q4 as a whole (46.5) was little changed from those recorded in Q3 (46.3) and Q2 (46.4), and below the annual average (47.2).
December saw output continue to fall in both the manufacturing and service sectors. Manufacturing remained the weaker performer, with production falling for the tenth straight month in tandem with weak demand from both domestic and export markets. Service providers reported a drop in business activity for the eleventh month in a row, although the rate of contraction eased to the slowest since July 2012.
There was a welcome return to growth for Germany, where a solid expansion of services activity offset ongoing contraction at manufacturers. France, Italy and Spain all remained in recession, but there was at least some brighter news from these nations, with rates of contraction easing in all three in December. (…)
Further job losses were implemented during December, with both manufacturers and service providers reporting further cuts to payroll numbers. There were also signs of the German labour market stabilising, as a modest increase in service sector payrolls offset further jobs cuts at manufacturers. Employment fell again in France, Italy and Spain, with rates of loss broadly similar to November.