EUROZONE COMPOSITE PMI +1.4 TO 48.6

At 48.6 in January, from 47.2 in December, the Markit Eurozone PMI® Composite Output Index rose to a ten-month high and came in above its
earlier flash estimate of 48.2. Although signalling a further deterioration in output of the Eurozone private sector economy, the rate of decline has now eased for three straight months.

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Both manufacturing production and service sector business activity declined at the slowest rates since last March, with similar modest rates of decline seen in each sector.

Inflows of new orders fell at the slowest pace since last February, dropping at reduced rates in both manufacturing and services. Goods producers continued to see the steeper rate of contraction.

A diverse picture was seen among the four largest euro members, with strong growth in Germany – output grew at the fastest rate for just over a yearand- a-half – contrasting with ongoing downturns in France, Italy and Spain. Output in France fell at the steepest rate of these four countries, registering the fastest monthly decline since March 2009 and
causing the gap between the headline indices for France and Germany to increase to the widest in the survey history. The rate of decline also
accelerated slightly in Italy, but eased to a 19- month low in Spain.
While Germany saw new orders rise for the first time in 11 months, France, Italy and Spain all saw rates of decline ease.

The Eurozone labour market remained in the doldrums at the start of 2013. Job cuts were reported for the thirteenth straight month, with the
rate of loss hitting the fastest for over three years. Rates of decline remained steep and gathered pace in France, Italy and Spain.

Services:
The Eurozone service sector contracted for the twelfth successive month in January. At 48.6, up from 47.8 in December, the Markit Eurozone
Services Business Activity Index rose to a ten month high and signalled only a modest reduction in business activity. The rate of contraction was
also slightly slower than signalled by the earlier flash estimate.

The French, Italian and Spanish service economies all remained in contraction in January. Rates of decline gathered pace in France and Italy – to the fastest since March 2009 and July 2012 respectively – but slowed in Spain to the weakest in the current 19-month sequence of contraction.

Levels of new business also declined at the start of 2013 but, as with total activity, the rate of contraction eased to a ten-month low. New order
inflows deteriorated in France, Italy and Spain – albeit at slower rates than in December – in contrast to solid improvements in Germany and
Ireland.

Job losses were reported for the thirteenth month running in January, with the latest survey signalling a further solid reduction that was the sharpest for four months. France, Italy and Spain all reported steep and accelerated cuts.

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