|Composite - Level||54.0||54.3||54.2|
|Services - Level||53.9||54.2||54.2|
The Eurozone economy was a little stronger than originally thought at year-end. With the flash service sector PMI revised up 0.3 points to 54.2, the final key composite output index weighed in at 54.3, also 0.3 points above its flash estimate and 0.1 points firmer than its final November reading.
The improvement in services reflected another marked increase in new business albeit at a slightly slower rate than in mid-quarter. Backlogs were also up for a seventh straight month and the buoyancy here contributed towards the largest addition to headcount in more than five years.
Input costs remain subdued with the rate of inflation up only marginally on November's sluggish print. At the same time, output prices decreased again with a rate of decline steeper than in any month since June.
In terms of composite output, the best performer was Ireland (59.2) ahead of Italy (56.0 and a 58-month high) and Germany (55.5). Spain (55.2) also enjoyed a good period but France (50.1) dropped to an 11-month low.
Despite today's positive revisions, the latest PMI figures should still be consistent with growth of Eurozone real GDP last quarter of about 0.4 percent. This clearly remains too sluggish to have the impact required upon the region's inflation rate and will fuel speculation that the ECB's current QE programme will not be enough to meet the central bank's medium-term price stability goal. Easing risks in 2016 remain significant.
The Eurozone Composite PMI is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 manufacturing and services firms. National manufacturing data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland.
The Eurozone Services PMI (Purchasing Managers' Index) is produced by Markit and is based on original survey data collected from a representative panel of around 2,000 private service sector firms. National data are included for Germany, France, Italy, Spain and the Republic of Ireland. These countries together account for an estimated 80% of Eurozone private sector services output.
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.