A general overview of the cafes on the empty Leidseplein on March 27, 2020 in Amsterdam, Netherlands
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LONDON – Eurozone business activity has seen a fairly robust December, according to the latest preliminary purchasing manager index (PMI) data for the region.
The PMI’s composite output index for the eurozone, which looks at activity in both manufacturing and services, stood at 49.8 in December, up from 45.3 in November. However, a value below 50 still indicates a contraction in business activity.
Commenting on the flash PMI data, Chief Business Economist at IHS Markit Chris Williamson noted that “the eurozone economy is doing better than expected in December”.
“The data indicates that the economy is nearing stabilization, after plunging into another severe decline in November amid renewed measures to close Covid-19. The picture is very mixed by sector.”
The euro traded higher against the dollar, at $ 1.22, and had gained 0.15% against the pound sterling, buoyed by news that progress was being made in the trade deal negotiations between the EU and the UK after Brexit.
Last month’s value was already the lowest for the index in six months, falling from 50 in October.
It was widely expected that the eurozone economy would have been hit again by another round of lockdowns imposed during a second wave of coronavirus infections.
There were plans to relax the rules over Christmas to allow families to gather, but several governments, including Germany and the Netherlands, have instead tightened restrictions due to an increase in the number of cases.
Germany introduced more restrictions on Wednesday, closing schools and non-essential businesses. This is in addition to the closure of restaurants, bars and leisure centers that have been closed since November. The German public health agency, the Robert Koch Institute, announced 27,728 new infections in the past 24 hours, bringing the total to 1,379,238. “We have been forced to take action,” German Chancellor Angela Merkel said last Sunday when further restrictions were announced.
According to World Health Organization data, Europe has registered more than 22 million cases of coronavirus since the pandemic surfaced in the region in early spring, and there have been more than 493,000 deaths from the virus.