Service Sector Provides Little Cheer for Eurozone Activity

07 January 2003

Growth in the Eurozone’s service sector slowed in December according to the latest report from Reuters and NTC Research.

The Service Sector Business Activity Index dipped from 50.8 in November to 50.6 last month, leaving it only marginally above the 50.0 threshold between expansion and contraction. Despite strong growth in Italy, France and Spain, the index was dragged down by a sharp fall in German activity.

On the bright side, December did see the first rise in the Business Expectations Index for five months (from 58.1 to 59.8), and the Incoming New Business Index also climbed, up from 50.3 to 50.7.

However, the rate of decline quickened in the components measuring employment (47.0) and outstanding business (46.9).

These service sector results, taken with last week’s manufacturing figures [WAMN: 03-Jan-03], give a worrying picture of overall business activity.

The Composite Output Index, measuring both services and manufacturing, fell from 51.1 in November to the near-stagnation reading of 50.5 in December.

There were falls in the composite barometers of new business (50.6 to 50.1), prices (52.5 to 52.4) and employment (47.3 to a record low of 46.4).

Data sourced from: NTC Research; additional content by WARC staff