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Eurozone business activity growth falls to 4-year low

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Eurozone business activity growth falls to 4-year low

Business activity in the eurozone fell for a third straight month in December 2018 to its lowest level in more than four years on weak employment growth and inflows of new orders, IHS Markit said.

The final eurozone PMI composite output index came in at 51.1 in December 2018, lower than the flash estimate of 51.3 and the previous month's final reading of 52.7. The Econoday consensus predicted that the index would stand at 51.3.

"Levels of unfinished business are now falling for the first time in nearly four years as previously received orders are not being fully replaced with new work," said Chris Williamson, chief business economist at IHS Markit. "The data are consistent with eurozone GDP rising by just under 0.3% in the fourth quarter, but with quarterly growth momentum slowing to 0.15% in December."

The final services business activity index came in at 51.2, compared with a flash estimate of 51.4 and November 2018's reading of 53.4. This reflected the third successive monthly decline and the weakest rate of expansion in more than four years, according to the report.

Overall business confidence continued to deteriorate in the month, falling to its lowest level in over four years. "Worries reflect multiple headwinds from trade wars, Brexit, heightened political uncertainty, financial market volatility and slower global economic growth," Williamson said.

In France, the composite output index edged down to 48.7 in December 2018 from 54.2 in November 2018, reflecting the first decline in 2.5 years amid disruptions owing to the yellow-vest protests. Germany's composite output index declined to a 66-month low of 51.6 from 52.3 in November 2018.