Eurozone business growth lost momentum in January as Omicron hit demand

London — Research shows that January’s eurozone economic growth has lost momentum as block’s major service industry struggled to curb demand amid tightening regulations, including variants of the Omicron coronavirus. rice field.

Some governments of the monetary union have also curtailed demand, partly due to sharp price increases due in part to supply and labor problems, while at home to citizens to prevent the spread of more toxic variants. I encourage you to be there.

IHS Markit’s final Composite Purchasing Managers’ Index was considered a good guide to overall economic health, dropping from 53.3 in December to 52.3 in January. This is the lowest since February last year and is slightly below the tentative estimate of 52.4.

” [eurozone] Chris Williamson, Chief Business Economist at IHS Markit, said:

“This slowdown is consistent with the highest tightening of containment measures to combat viruses since May last year. [eurozone] In the surge of COVID-19 cases associated with Omicron. “

These measures have had a particular impact on the service industry, with its PMI dropping from 53.1 in December to a nine-month low of 51.1.

Demand growth was almost exhausted and the service new business index fell from 52.5 to 51.3. This is the lowest since April and is not well above the 50 mark that separates growth and contraction.

Consumers have seen prices skyrocket in recent months, and January was no exception. As input costs increased, companies passed on some of their burden to their customers, and the combined output price index rose from 60.6 to 61.9.

This index has been raised only once since IHS Markit began collecting data in late 2002. It was November.

“A key concern is that inflationary pressures continue to rise and soaring energy prices could add to the upward pressure in the coming months,” Williamson said.

Inflation in the euro area is set to rise faster than previously expected throughout 2022, which could put pressure on the European Central Bank to tighten its policies, according to economists polled by Reuters last month.