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Eurozone economy ‘close to stabilizing’ – key survey

Agence France-Presse
Eurozone economy ‘close to stabilizing’ – key survey

PARTIAL LOCKDOWN. A cyclist rides past Christmas illumination on a wooden fence at Alexanderplatz square in Berlin on December 16, 2020, on the first day of a partial lockdown in Germany to curb COVID-19 infections.

Photo by Tobias Schwarz/AFP

'The eurozone economy is faring better than expected in December,' says IHS Markit's Chris Williamson

Eurozone business activity was “close to stabilizing” in December as more robust manufacturing production helped counterbalance a slump in the service sector caused by coronavirus lockdowns, a key survey showed on Wednesday, December 16.

“The eurozone economy is faring better than expected in December,” Chris Williamson, chief business economist at IHS Markit, said. 

“The data hint at the economy close to stabilizing after having plunged back into a severe decline in November amid renewed COVID-19 lockdown measures.”

The firm’s closely watched Purchasing Managers’ Index rose from 45.3 points in November to 49.8 this month, close to the key 50-point level which indicates growth. 

Williamson said the indicator showed the downturn in the 4th quarter “looks far less steep than the hit from the pandemic seen earlier in the year, though the picture is very mixed by sector.”

While growth in manufacturing output in the 19-member single currency quickened in December, service sector output continued to fall for a 4th successive month. 

The European Union looks set to roll out coronavirus vaccinations in the coming days after its medicines regulator brought forward a key meeting to next Monday, December 21. 

The imminent start of inoculations has sparked hope of a return to a more normal life and fuller economic activity in 2021 – but IHS Markit warned that the “near term still looks very challenging” for many companies as restrictions stay in force. 

“Many of these containment measures look likely to remain in place for some time to come, constraining the economy as we head into the new year,” Williamson said. –

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