Eurozone growth hits four-month high in December

Growth in the eurozone economy rose to a four-month high in December, the closely watched purchasing managers’ index survey suggests.

The final reading of the Purchasing Managers’ composite index (PMI) for December, which combines manufacturing and services sector surveys, was revised up to 54.3 from an earlier estimate of 54, according to Markit.

Any figure above 50 indicates growth.

“The eurozone economy starts 2016 on a solid footing,” said Markit.

The dominant services industry drove the improvement with the PMI index reading for the sector 54.2, unchanged from November, but higher than an earlier estimate of 53.9.

The survey also showed that in the final month of the year, private sector firms added new jobs at the fastest rate since May 2011.

Disappointment

Despite the positive data, Markit chief economist Chris Williamson said the survey indicated only “a modest 0.4% increase” in economic growth for the fourth quarter, suggesting 1.5% growth for the year as a whole.

“Given that we have seen almost a year’s worth of quantitative easing, there is a concern that policy is proving somewhat ineffectual,” he added.

Official data on Tuesday showed inflation in the eurozone remained at 0.2% in December, unchanged from November and lower than economists had predicted.

The data will put pressure on the European Central Bank to act further to boost the struggling European economy.

The central bank disappointed market hopes last month with its attempts to revive the economy, which were less dramatic than analysts had expected.

Credit:BBC