Eurozone composite PMI at four-month high as services data revised up

Economic activity in the eurozone continued to shrink in November despite the closely watched composite purchasing managers' index (PMI) rising to a four-month high.

The S&P Global ad Hamburg Commercial Bank (HCOB) eurozone composite PMI Output Index recorded its sixth straight sub-50 reading last month, indicating a contraction in activity, data revealed on Tuesday.

The composite PMI, which combines activity in both the manufacturing and services sectors, was revised up to 47.6, its highest since July and up from October's 35-month low of 46.5.

The consensus estimate was for a reading in line with the initial estimate of 47.1.

The revision came as the second reading of the November services PMI was changed to 48.7 from the flash estimate of 48.2.

“The service sector maintained its downward slide in November. The modest improvement of the activity index does not leave much room for optimism regarding a swift recovery in the immediate future," said HCOB's chief economist Cyrus de la Rubia.

“Service providers navigate a pricing puzzle. While depressed demand calls for price cuts to spark interest, uncomfortably high input price inflation urges an increase to avert losses. Presently, firms are choosing the latter path, but the strategy is not without risks. Consumer pullbacks to rising prices might escalate, dampening appetites for consumer services even further."