Euro-Area Economy Ends 2019 Still Struggling as Momentum Stalls
IHS Markit’s Composite Purchasing Managers’ Index stayed at 50.6 in December, slightly lower than economist estimates of 50.7.
(Bloomberg) -- The euro zone’s private sector is barely growing as 2019 draws to a close, rounding off a year that has seen factories battered by trade uncertainties.
IHS Markit’s Composite Purchasing Managers’ Index stayed at 50.6 in December, slightly lower than economist estimates of 50.7. The reading signals fourth-quarter output will be the weakest since the region exited a double-dip recession in the second half of 2013.
The PMI signals that the private sector is failing to pick up momentum -- the 50 level divides expansion from contraction.
The challenging outlook was highlighted by the European Central Bank last week, which revised down its projection for growth next year. Still, Christine Lagarde, in her first policy update as president, said there are signs the economy is beginning to stabilize and downside risks are “somewhat less pronounced.”
In France, service-sector resilience largely countered an unexpectedly sharp drop in manufacturing momentum, while Germany’s industrial contraction deepened.
IHS Markit said the bloc’s employment growth slowed to a five-year low, reflecting subdued optimism about the outlook, and price pressures moderated.
“There are scant signs of any imminent improvement. New order growth remains largely stalled and job creation has almost ground to a halt,” said Chris Williamson, chief business economist at the London-based company. Businesses are “struggling against the headwinds of near-stagnant demand and gloomy prospects for the year ahead.”
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