Surprise start to the year in Eurozone business activity

PMI indices in the Euro Zone showed that the economy grew for the first time in 7 months. This situation increased the optimism that the regional economy could make a soft landing.

According to the information of S&P Global, the composite PMI index covering the manufacturing and services branches in the Euro Zone rose from 49.3 to 50.2 in January. The expectation was 49.8. Thus, the index has crossed the critical 50 threshold for the first time since June.

The index’s value above 50 indicates growth in the branch.

The services PMI index rose to 50.7 in the region. The expectation was 50.1. Manufacturing PMI rose to 48. Although this is the highest level in 5 months, it is still in contraction territory. The expectation was 48.5.

Chris Williamson, Global Chief Economist at S&P, said the stabilization of the Eurozone economy is proof that the region can escape from calm.

Factors such as the slowdown in inflation, the seasonal normal weather conditions in the Euro Zone struggling with the power crisis and the decrease in supply chain problems cause optimism about the economy. But again, the data announced in Germany and France, the two largest economies of the region, revealed that the picture is still troubled.

In Germany, the services PMI increased to 50.4, exceeding the estimates, while the manufacturing PMI exceeded the assumption of 47 with 48. under left. In France, the services PMI fell to 49.2, while the manufacturing PMI was 50.8, surpassing the 49.5 estimate.