AGI - The service sector still fails to take off in Europe e remains the main brake on the economy. To weigh on the trend in December is once again the increase in infections from Covid-19 and the new restrictions implemented by the countries. All Pmi indices, developed by Ihs Markit, in fact, remain below the threshold of 50 points, which means a contracting activity.
The SME services of the Eurozone in December stood at 49.1 points, an increase compared to November (45.3) but lower than expectations which estimated a 49.8. In particular for Italy, Ihs Markit emphasizes that the tertiary sector remains a "Significant brake" for the recovery.
The index rose slightly in December to 39.7 from 39.4 in November but it is still the "fifth consecutive monthly contraction of Italian tertiary production ". The composite index rises to 43 from 42.7.
“The PMI data for December provided us not much positive news for the Italian tertiary sector, which has remained in a profound state of contraction given the new restrictive measures, ”he explains Lewis Cooper, Economist at IHS Markit.
“Economic activity has again marked a substantial decline, with domestic and foreign demand further stifled by the measures adopted. - he adds - At the end of this fourth quarter, thehowever, optimism has increased registering the highest level in the last three months, thanks to the positive news on the vaccine and the hopes of a strong economic recovery in 2021. Nonetheless, the service sector remains a significant drag on Italian economic performance, with a rapid collapse in activity that has counterbalanced the new rise in manufacturing production. Until the restrictions are relaxed, the contraction of the tertiary sector will have a heavy impact on any recovery ”.
Going into the details of the other states, the definitive services SME of the Germany in December it rose to 47 points compared to 46 in October, below the 47.7 points of the preliminary. The SME services index in France it stood at 49.1 points compared to 38.8 the previous month, below expectations at 49.2 points.
In Spain instead it advances to 48.09 from 39.5 in November, beyond expectations which predicted a rise to 45. Finally, in Great Britain it rises to 49.4 from 47.6 in November and against an expected 49.9.
To sum it up, euro zone economic activity contracted stronger than previously thought at the end of 2020 and could get worse this month as new restrictions to contain the coronavirus hit the services sector hard. With the'surge in infections, European countries have in fact closed the catering services - bars and restaurants - thus putting a brake on this sector.
Meanwhile, with unemployment on the rise and debt hitting record highs, the European Central Bank launched further stimulus measures last month to pull the Eurozone out of a double recession.
But it is expected that theeconomy will gain momentum later this year thanks to hopes for a vaccine, a December Reuters poll found, and will return to pre-crisis levels within two years.
The composite index of future production has risen to 64.5 from 60.4, its highest reading since April 2018: “We are in a situation of darkness before dawn. There is light at the end of the tunnel, but the tunnel is longer than we initially expected, ”noted an analyst from Ing. Bert Colijn.
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