The IHS Markit Eurozone PMI Composite Output Index improved slightly during December, but still signalled weak economic growth. After accounting for seasonal factors, the index recorded 50.9, up from 50.6 in November and slightly better than the earlier flash reading. Despite the improvement to a four-month high the index nonetheless continued to post at a level amongst the lowest seen since the first half of 2013. The divergence between the performances of the manufacturing and services economies remained noticeable in December. Overall growth remained centred on the service sector, with growth here reaching a four-month high. In contrast, manufacturing output declined at a rate not exceeded for nearly seven years. Supporting the upturn in overall activity was an increase of incoming new work for the first time in four months. Growth was, however, only marginal, and again undermined by weakness in foreign demand. Latest data showed exports falling for a fifteenth successive month, albeit to the weakest degree since the start of 2019.

The Eurozone PMI Services Business Activity Index improved in December to a four-month high of 52.8, up from 51.9 in November. All nations covered by the survey recorded growth in activity, led by Spain and Ireland. A similar-sized increase in new work was recorded in December, although growth was again dampened by a reduction in new export business, the sixteenth in as many months.

Looking ahead to the coming 12 months, business confidence about the future strengthened to its highest level since July. The upturn was led by a strong improvement in sentiment amongst German service providers.