The Eurozone PMI Composite Output Index rose to 52.1 in December, according to the flash estimate, up from 51.7 in November. The upturn brings the rate of growth close to the 27-month peak seen in September and marks a reversal of the easing in the rate of growth seen over the prior two months. Growth of new orders also accelerated, showing the biggest jump in demand for goods and services since June 2011. Manufacturing led the upturn, with output rising for the sixth successive month and the rate of increase hitting the highest since April 2011. New orders at goods producers likewise rose for a sixth month, also showing the fastest expansion since April 2011. Order book growth was fueled by rising exports, growth of which continued to run at the fastest clip since early-2011. It was a different story in services. Although activity in the service sector rose for a fifth straight month in December, the rate of growth slowed for the third successive month from the already weak pace seen in November, resulting in the smallest monthly expansion since August. Growth of new business also remained only very modest in the service sector; easing slightly in December as demand from many domestic markets within the single currency area remained lackluster, hindered in the case of consumer services by high unemployment.
Increasingly divergent trends were also evident by country. Of greatest concern was a drop in private sector activity for a second month running in France, where the rate of decline accelerated to the fastest since May. In contrast, Germany continued to record a rate of expansion not seen since the first half of 2011. Output grew for an eighth successive month, at a rate little-changed from November’s 29-month high. Elsewhere across the region, output rose for the fifth month running and at the steepest rate since April 2011. Private sector employment in the eurozone fell for a twenty-fourth consecutive month, but the decline was only marginal and the smallest seen over this period. A fractional decline in service sector employment compared with broadly no change in manufacturing jobs. By country, employment rose for the third time in four months in Germany, with jobs being created at the highest rate since January 2012. Job losses were reported for a second month in a row in France, although the rate of decline eased. Elsewhere in the region, the pace of job losses slowed on average to the lowest since July 2011