The downturn in eurozone business activity

eased slightly into the new year. S&P Global’s Final Manufacturing PMI for the bloc rose for a third successive month to 48.8 in January, up from 47.8 in December and confirming a previous ‘flash’ reading. Despite still being below the 50-mark that separates growth from contraction, the reading was the highest since August 2022.

^{S&P Global}

• Furthermore: New orders continued to fall, but at a rate that was the softest since May 2022. Backlogs of work declined sharply and the survey pointed to another month of broadly stable supply-chain conditions. Input cost inflation eased to a 26-month low. Business confidence improved, with growth expectations bolstering to their strongest since February 2022.

• Zoom in: Some parts of the euro area even recorded an expansion in output in January. Final Manufacturing PMIs for France and Italy registered at 50.5 and 50.4, respectively. Meanwhile, Europe’s largest economy remained in contraction as the reading for Germany came in at 47.3, slightly higher than December’s reading of 47.1.