Analysts at Nordea Markets suggest that the Eurozone’s end-of-the-year PMIs confirm that the region is in a deep manufacturing recession, but still has a robust service sector.

• “The euro area composite PMI kept steady in December, just above the 50-mark at 50.6. This makes for a weak fourth quarter and implies a standstill in euro area growth.
• The divergence between the manufacturing and service sectors continued, as the manufacturing PMI disappointed and fell to 45.9 while the services component slightly improved to 52.4. Weakness from the manufacturing sector is still rather contained and not spilling over to the service sector so far.
• The manufacturing PMI in Germany surprised to the downside, and stood at 43.4, contrary to expectations of improvement. Services PMI came in a bit higher than last month, at 52.0. Employment components are worrying, with especially manufacturing staff cuts worsening. Subdued new orders are keeping a lid on investment. Germany continues to be a drag on euro area growth.
• In France, both manufacturing and services components remained in expansionary territory. Growth continues to be mainly driven by the private service sector. The manufacturing PMI did fall however, and came out at 50.3, a good bit below consensus of 51.5. Services PMI, on the other hand, saw an uptick, albeit marginal, to 52.4.”