Euro zone business activity ‘shut to stabilizing’ in December despite Covid lockdowns

A normal view of the cafes on the empty Leidseplein sq. on March 27, 2020 in Amsterdam, Netherlands

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LONDON — Business activity in the euro zone is having a reasonably strong December, in accordance to the most recent preliminary buying supervisor’s index (PMI) information for the area.

The flash euro zone PMI composite output index, which seems at activity in each manufacturing and companies sectors, got here in at 49.8 in December, up from 45.3 in November. A studying under 50 nonetheless signifies a contraction in business activity, nonetheless.

Commenting on the flash PMI information, Chief Business Economist at IHS Markit Chris Williamson famous that “the euro zone economy is faring better than expected in December.”

“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 fourth quarter downturn consequently looks far less steep than the hit from the pandemic seen earlier in the year, though the picture is very mixed by sector.”

The euro was buying and selling increased towards the greenback, at $1.22, and was up 0.15% towards sterling, buoyed by information that progress was being made in post-Brexit commerce deal negotiations between the EU and U.Okay.

Last month’s studying was already the bottom for the index in six months, and was down from 50 in October.

The euro zone economic system was extensively anticipated to have taken one other hit from a brand new spherical of lockdowns that had been imposed amid a second wave of coronavirus infections.

There had been plans to calm down guidelines over Christmas to permit households to collect however a number of governments, together with Germany and the Netherlands, have as a substitute tightened restrictions due to a surge in instances.

Germany launched extra restrictions on Wednesday, closing faculties and non-essential companies. This comes on high of the closure of eating places, bars and leisure facilities which have been shut since November. Germany’s public well being physique, the Robert Koch Institute, introduced 27,728 new infections in the previous 24 hours, bringing the overall tally to 1,379,238. “We are forced to take action,” German Chancellor Angela Merkel stated final Sunday as additional restrictions had been introduced.

Europe has recorded over 22 million coronavirus instances because the pandemic emerged in the area in early spring, in accordance to information from the World Health Organization, and has seen over 493,000 deaths due to the virus.

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