- Prior 53.0
- Composite PMI 52.8 vs 52.4 prelim
- Prior 52.5
Better revisions in both France and Germany sees the Eurozone readings above for both the services and composite prints come in at fresh 30-month highs. That points to a relatively solid economic expansion in the region in looking to end the year, which will give the ECB much breathing room in justifying the pause to rate cuts. HCOB notes that:
“The service sector in the eurozone is showing clear signs of recovery. The strong performance in the service sector was even enough to more than offset the weakness in the manufacturing sector, meaning that economic output in the eurozone grew slightly faster in November than in the previous month. We therefore expect the growth rate in the final quarter of the year to show a slight acceleration.
“The eurozone services sector is now growing for the sixth month in a row and at its fastest pace since May 2023. At 53.6, the index level is far from a boom in historical terms, which tends to start in the high 50s. However, it is fair to say that performance is relatively robust. The geographical breadth of the recovery supports this assessment. For the coming year, we expect positive stimulus from Germany's expansionary fiscal policy and Spain's sustained high economic growth. In France, the fragile political situation argues against increasing momentum. In Italy, there is still hope for effects from the EU Next Generation funds, but these are likely to be felt primarily in the construction industry and only indirectly by service providers.
“The inflation rate in the service sector, which the ECB is monitoring with particular attention, has weakened significantly again in terms of sales prices. At the same time, cost inflation is higher, which is likely to be related to wage growth that is slowing but still above average. All in all, the ECB is likely to feel supported in its clearly communicated line of leaving interest rates unchanged at the upcoming central bank meeting.”
