December was another weak month for economic activity but at least a probable contraction appears to have been marginally less steep than originally thought. Hence, the 48.9 flash composite output index was nudged a tick higher to 49.0 and now stands 2.7 points stronger than in November and at a 6-month high.

In services, the 49.0 flash sector PMI was revised up to 49.2, some 3.1 points stronger than its final mid-quarter print. Nonetheless, December saw another sizeable fall in new business that was only slightly shallower than recorded in November. Exports were again notably weak. Soft demand was reflected in a fourth straight monthly fall in backlogs although the decline here was also in part attributable to another increase in headcount which expanded for a thirtieth successive month. Business expectations for the year ahead continued to improve from September's recent low and for the first time in four months companies on balance were optimistic, albeit only just.

Meantime, input cost inflation continued to ease despite another sizeable monthly increase in charges but remained elevated. A similar pattern was true for output prices where inflation slipped to its lowest mark since last August.

In sum, the trend in private sector business activity remains down and fourth quarter GDP very likely contracted. Still, overall weakness is not as marked as it might have been and this is reflected in the ECDI-P which, at 12, shows a measured degree of outperformance by the economy as a whole.

No revisions are expected to the flash data.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.

The Purchasing Managers Index (PMI) survey has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.