Eurozone business activity steady in December

Business activity in the eurozone remained steady in December, according to data released on Thursday.

Markit’s flash composite purchasing managers’ index – which combines the services and manufacturing sectors – came in at 53.9, just a touch better than expectations of a slight dip to 53.8 and matching November’s 11-month high.

The services PMI fell to 53.1 from 53.8, missing expectations of a reading of 53.7, while the manufacturing PMI rose to 54.9 from 53.7, hitting a 68-month high.

Chris Williamson, chief economist at Markit, said: “The eurozone economy is ending 2016 on a strong note. The PMI indicates that business activity has risen at the fastest rate so far this year in the fourth quarter, signalling GDP growth of 0.4%.

“However, while the December PMI surveys put the eurozone economy on a strong footing to start 2017, there is clearly the potential for political uncertainty to derail growth as elections loom in the Netherlands, France and Germany, and Brexit discussions begin.”

Stephen Brown, European economist at Capital Economics, said: “Overall, the PMI points to a decent end to the year for euro-zone activity. But with a number of political risks approaching and the boost to consumers’ real income growth from lower energy prices now fading, the strong level of activity implied by the PMI and other surveys seems unlikely to last – we expect GDP growth to slow from about 1.6% this year to 1.0% in 2017.”