Activity in the Eurozone picks up momentum in January after six months of falls thanks to the oxygen of the technological and pharmaceutical sectors. After half a year of contraction, the Flash PMI indicator for January published this Tuesday by S&P Global (formerly IHS Markit) stands at 50.2 points in the first month of the year, 0.9 points above the December level and slightly higher than the 50 points that separate the border between growth and loss of activity.
The index shows an advance in activity in the services sector for the first time since June of last year and although manufacturing production continued to be in the doldrums, its decline was the softest since the middle of last year. In particular, the increase in activity was driven by the technology, pharmaceutical and healthcare and industrial services sectors, while financial services eased their decline and tourism and leisure showed signs of determination after months of decline.
Along with the upturn in activity, S&P has detected an improvement in the outlook for the next twelve months, which reached its highest since May 2022, an optimism that also includes forecasts for new orders despite the fact that they will continue to decline in January.
This optimism led companies to increase their hiring, with which employment fell in January at the fastest rate in a quarter, a growth that covered all sectors and countries. In addition, in January there was an attenuation in cost inflation, thanks to the lower pressures in the supply chains and the containment of energy prices, but even so the prices charged increased more than in December in an attempt to recover the profit margins.
In disaggregated terms, the PMI of Commercial Activity of the Services Sector is at a half-year high of 50.7 points, that is, an increase of 0.9 compared to the last month of 2022. For its part, the PMI of the Sector Manufacturing reaches 48.8 from 47.8 in December. Also at maximums for five months. Likewise, the Manufacturing Sector Production PMI, which measures whether company activity is higher, equal or lower than the previous month, recorded 49.0 points, an increase of 1.2 points. Again, a brand unbeaten for seven months.
These data are made public at a time when the euro zone has confirmed how the worst scenario of economic prospects has not come to pass, and its members are weathering the storm generated by the war in Ukraine, the sharp increase in prices (inflation sold at 9.2% in December in the region as a whole) and the energy crisis, which has forced economies to move at an accelerated pace to reduce their dependence on Russian hydrocarbons.