Eurozone Business Slides, But Rate of Decline Slowing

07 January 2002

The Reuters Eurozone Composite Output Index for December (compiled by NTC Research), measuring overall private sector activity in the area served by the euro, indicated a fourth consecutive month of contraction.

At 47.6, the index stayed below the 50.0 no-change threshold, but nevertheless rose for the second month in succession, well above October’s series nadir of 45.2, prompting the report’s compilers to suggest that “the eurozone private sector economy is recovering from the immediate adverse effects of September 11, which exacerbated the general downward trend in output.”

On top of the data for manufacturing, released last week [WAMN: 02-Jan-01], the researchers found that service sector activity also fell for the fourth month in a row, though at the slowest rate so far (49.2).

Employment continued to fall, but again the rate of decline slowed. The composite index figure stood at 47.2, up from November’s 46.9, while that for just the service sector edged up from 48.7 to 48.9.

It was a similar story for new orders. Overall new business, which has been contracting since April, stood at 46.2, a recovery from October’s 42.8 and November’s 43.6, with the index for the service sector standing at 47.9, up from the previous month’s 44.2. However, companies in Italy, France and Ireland reported slight increases in new orders for December.

News source: Reuters/NTC Research