At 49.6 the final PMI composite index for December signalled a renewed contraction of business activity. The latest print is 0.1 points stronger than its flash estimate and 1.3 points above November's 10-month low. Still, it was not enough to break through the 50-growth threshold.

At the national level, the best-performing countries were Spain (56.8) and Ireland (52.1) both of which saw an expansion of business activities. The weaker performing countries were Italy (49.7), Germany (48.0) and France (47.5), all of which were well short of the 50-growth threshold. Spain managed a record 21-month high, but the weakness of the two member states of France and Germany was enough to offset growth seen in Spain and Ireland.

The final services PMI for December was 51.6, some 0.2 points above the flash estimate and 2.1 points above November's final mark. This signalled an expansion. Demand rose for the first time since August, however only slightly. Employment continued to rise, sustaining a history of job creation going back almost 4 years. Both input cost and output charges increased at faster rates in December with input costs reaching a 5-month high and output charges reaching a 7-month high.

The final December data put the Eurozone RPI at 6 and the RPI-P at 8 meaning that overall economic activity is generally within market forecasts.

No change is the call from the flash at 49.5 for the composite final and no change from 51.4 for services final.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. 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 using a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

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.