Euro Zone Growth Slows in December but Completes Strongest Quarter Since 2023

• The euro zone economy expanded at a slower pace last month but ended 2025 with its strongest quarterly growth in more than two years as solid momentum in services offset a manufacturing contraction, a ⁠survey showed today. While manufacturing activity shrank, persistent growth in services kept the common currency bloc in a steady expansion last year, even in the face of US tariffs on European imports.
• HCOB's final composite Purchasing Managers' Index for the bloc, compiled by S&P Global ‍and seen as a good gauge of overall economic health, eased to 51.5 in December from November's 30-month high of 52.8, below a preliminary estimate of 51.9.
• That finish healthily above the 50-mark, which separates growth from contraction, meant the economy expanded every month in 2025, a streak not seen since 2019. The fourth-quarter average PMI reading of 52.3 was the highest since the second quarter of 2023. New orders expanded for the fifth month in a row but ⁠at the weakest pace since September, with the manufacturing sector showing a quicker decrease in new factory orders while services companies reported softer sales growth.
• Meanwhile, The services business activity index ⁠eased ‍to 52.4 from November's two and a half year high of 53.6. Spain was the standout performer with its composite index rising to a two-month high, while Germany's expansion moderated to a four-month low. Italian ‍business barely grew, and French private sector activity stagnated. Meanwhile, input cost inflation accelerated to a ⁠nine-month high with intensifying price pressures across both sectors, though output price inflation remained unchanged from November.
• Overall employment growth ticked slightly higher ⁠from November, though it remained marginal due to continued manufacturing job cuts.

(Source: Raidió Teilifís Éireann Media (RTE))