Euro Zone Contraction Deeper Than Thought In Dec As Lockdowns Bite -PMI

  • Economic activity in the eurozone contracted more sharply than previously thought at the end of 2020 and could get worse as renewed lockdown restrictions imposed to contain the coronavirus hit the bloc's dominant service industry, a survey showed.
  • With infection rates soaring across Europe, countries have clamped down on public life. Germany is set to extend its strict lockdown until the end of the month and Italy decided on Tuesday to keep some nationwide restrictions in place.
  • IHS Markit's final December Composite Purchasing Managers' Index (PMI), seen as a good gauge of economic health, did rise to 49.1 from November's 45.3 but was significantly below a flash reading of 49.8. Anything below 50 indicates contraction.
  • With much of the service industry being forced to close demand also shrank a lot more than thought. The final services new business index was 46.6 compared to the flash estimate of 47.9, albeit better than November's 40.6.

(Source: Reuters)