Eurozone business activity falls at slowest rate since June - PMI

Business activity in the eurozone fell at the slowest rate for six months in January, according to provisional survey data released on Wednesday, albeit with downturns persisting in both manufacturing and service sectors amid further falls in new business.

The flash eurozone composite purchasing managers index came in at at 47.9 compared with 47.6 in December. A mark below 50 indicates contraction.

Meanwhile, the services business activity index hit a three-month low of 48.4 from December's 48.8, while the manufacturing output index was 46.6, from 44.4 - a nine-month high.

“The commencement of the year brings positive tidings for the eurozone as manufacturing experiences a widespread easing of the downward trajectory witnessed in the past year," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

"This positive shift is evident across key indicators such as output, employment, and new orders. Notably, the export sector plays a pivotal role in driving the improvement of the latter, showing better conditions compared to the end of the preceding year."

He added that persistent attacks by Houthi rebels on commercial vessels navigating the Red Sea were "exerting discernible impacts on supply chains", with the PMI index for delivery times showing slipping below the 50 mark.

"Nevertheless, various industry reports indicate that businesses are not caught off guard like they have been previously, having learned from past disruptions. Many have proactively diversified their suppliers across geographical regions and enterprises, mitigating the potential fallout from such unforeseen challenges," de la Rubia added.

Reporting by Frank Prenesti for Sharecast.com