Eurozone PMI Services was finalized at 51.6 in January, easing from December’s 52.4. PMI Composite edged lower to 51.3 from 51.5. The data still point to ongoing expansion, but momentum softened slightly at the start of the year.
At the country level, the picture was mixed but broadly supportive. Spain was the strongest performer with PMI Composite at 52.9, despite slipping to a seven-month low. Germany (52.1) and Italy (51.4) both posted modest improvements. France (49.1) stood out as the laggard, with activity remaining in contraction territory.
According to Cyrus de la Rubia of Hamburg Commercial Bank, service sector growth has been “decent” but far from comfortable, with weak new business growth and limited hiring highlighting the recovery’s vulnerability.
While headline inflation is close to the ECB’s 2% target, services inflation remains sticky. Rising energy prices linked to cold weather, alongside a marked pickup in service sector input costs and selling prices flagged by the PMI, could reawaken concerns.
