Euro zone services PMI increases to 25-month high
The euro zone's services sector expanded at its fastest pace in over two years in December, albeit slightly slower than the flash estimate, while Spain saw a deeper contraction, according to a latest survey.
Markit's final euro zone services purchasing managers index (PMI) of about 2,000 companies, ranging from banks to restaurants, rose to a 25-month high of 53.6 last month from 53.0 in November, but revised down from a flash estimate of 53.7.
"The further rise in the purchasing managers' business activity index in December suggests that euro zone GDP growth in the fourth quarter of 2009 at least matched the 0.4 per cent quarter-on-quarter expansion achieved in the third quarter," said Howard Archer at IHS Global Insight.
Markets were little moved on the data.
This is the fourth consecutive month the index has been above the 50.0 mark that divides growth from contraction. But this comes after the index slumped to lows last year which were not seen in the index's 11 year history amid the worst recession in Europe since the Second World War.
Growth was led by buoyant activity in Germany and France, while Italy saw its index bounce above the 50.0 mark, in its biggest one month jump since April 2000. But it was a different story in Spain, which saw activity decline further and at a faster pace than in November, marking two years of declining activity with scant signs of any recovery in the short term. "The recovery is not being felt by all, and it is worrying to see Spain showing signs of a 'double dip' recession and lagging so far behind the other large euro area service economies," said Rob Dobson at data provider Markit. A separate report showed the UK services PMI rose to its highest level since September 2007. The divergence was also seen in the manufacturing sector, but data released on Monday showed the euro zone as a whole saw growth for the third straight month.
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