According to the Purchasing Managers Composite Index (PMI), which stood at 50.3 points in January from 49.3 in December, private sector activity in the euro area has grown again in the first month of 2023 , something that had not happened since June 2022.
Spain is also among the countries with the best activity data at the start of the year.
“The resumption of total business activity growth, albeit marginal, is good news and suggests that the euro zone could escape a recession,” said Chris Williamson, chief economist at S&P Global Market Intelligence.
This improvement in the levels of activity in the euro zone in the first month of 2023 reflected the momentum of the services sector, with a rise in the PMI to 50.8 points from 49.8 in the previous month, while the manufacturing PMI held steady. in contraction, with a reading of 48.8 points, compared to 47.8 in December, still its best result since August 2022.
The recovery for the third consecutive month in business activity levels in the euro area was made possible by a lower drop in demand, as new orders received fell at the weakest pace in the last seven months, including a stabilization of demand in the services sector.
Also, despite the persistence of challenging conditions in export markets, new orders from abroad decreased in January at the slowest pace since June 2022.
Eurozone companies thus managed to reduce their backlogs for the seventh consecutive month, despite which employment levels increased in January, even with an acceleration in the rate of job creation .
Regarding inflation, in the first month of 2023, although a new decrease in inflation in prices paid was observed, up to its weakest level since April 2021, there was a slight rebound in inflation in prices charged. .
“It is still too early to completely ignore recession risks,” warned Williamson, for whom the impact of rising interest rates on economic growth has yet to be fully experienced.
In the opinion of the chief economist at S&P Global Market Intelligence, “It remains to be seen whether the eurozone can take advantage of the marginal expansion seen in January or whether we could see a repeat of what happened in 2012, when the encouraging return to growth at the beginning of the year was brittle and gave way to a new slowdown.