- Final Services PMI 51.3 vs. 51.4 expected and 51.6 prior.
- Final Composite PMI 50.2 vs. 50.2 expected and 49.6 prior.
Key findings:
- HCOB Eurozone Composite PMI Output Index at 50.2 (Dec: 49.6). 5-month high.
- HCOB Eurozone Services PMI Business Activity Index at 51.3 (Dec: 51.6). 2-month low.
- Economy returns to growth, but sustained fall in new business suggests fragile recovery
Comment:
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“The slow pace of growth in the services sector, which was evident almost all of last year, continued at the start of 2025.
Putting it more positively, growth at service companies played a crucial role in keeping the eurozone economy in expansion
over the past year. Sluggish, but slightly accelerating growth in new orders and employment gives hope that this sector will
gain a bit more momentum in the first quarter of this year.
“Costs in the services sector rose at a faster rate in January. The above-average wage increases of recent months are
obviously playing a role here. In Germany, CO2 taxes were also raised at the turn of the year. This isn’t great news for the
ECB, which is monitoring inflation in the service sector very closely, as it’s proving to be very stubborn. In this respect, the
ECB did well to lower interest rates by only 25 basis points at the end of January instead of taking a more aggressive
approach.
“The services outlook is modest. The index for business expectations fell slightly and has been below the historical average
since mid-2024. Given the many political uncertainties, particularly the new elections in Germany and the fragile government
in France, this isn’t surprising. No major growth leaps are expected in this sector for now.
“When comparing the Composite PMIs among the four largest eurozone countries, Germany ranks second. Last year,
Germany and France repeatedly took the back seat, while Italy found itself in the unusual position of being more dynamic
than its two major economic partners. In January, however, Italy showed no progress, while Germany crossed the 50-point
mark for the first time in seven months. However, this will most likely not mark the beginning of sustainable growth, as
Germany also needs robust growth in the eurozone as a whole. The situation is currently weak, though, as economic output
in the currency union stagnated in the final quarter of last year, according to Eurostat.”
Eurozone Composite PMI