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| Eurozone business activity slows as stricter lockdowns take heavy toll on service sector | Eurozone business activity slows as stricter lockdowns take heavy toll on service sector |
| (7 months later) | |
| Business activity in the eurozone fell to a two-month low in January, preliminary data revealed on Friday shows, as tougher coronavirus-related lockdowns come into effect to stop the spread of new Covid-19 strains. | Business activity in the eurozone fell to a two-month low in January, preliminary data revealed on Friday shows, as tougher coronavirus-related lockdowns come into effect to stop the spread of new Covid-19 strains. |
| HS Markit’s final Composite Purchasing Managers’ Index (PMI), which is considered a good gauge of economic health and combines both manufacturing and services, declined to 47.5 in January, versus 49.1 in December. PMI above the 50 level separates growth from contraction. | HS Markit’s final Composite Purchasing Managers’ Index (PMI), which is considered a good gauge of economic health and combines both manufacturing and services, declined to 47.5 in January, versus 49.1 in December. PMI above the 50 level separates growth from contraction. |
| “Tighter COVID19 restrictions took a further toll on businesses in January,” Chris Williamson, the chief business economist at IHS Markit, said in a statement, adding that a double-dip recession for the region is looking “increasingly inevitable.” | “Tighter COVID19 restrictions took a further toll on businesses in January,” Chris Williamson, the chief business economist at IHS Markit, said in a statement, adding that a double-dip recession for the region is looking “increasingly inevitable.” |
| “Output fell at an increased rate, led by worsening conditions in the service sector and a weakening of manufacturing growth to the lowest seen so far in the sector’s seven-month recovery,” the report says. | “Output fell at an increased rate, led by worsening conditions in the service sector and a weakening of manufacturing growth to the lowest seen so far in the sector’s seven-month recovery,” the report says. |
| Earlier this week, President of the European Central Bank Christine Lagarde acknowledged that the growing number of cases and new pandemic-related lockdowns across the region are disrupting economic activity, posing “serious risks” to the eurozone economy. | Earlier this week, President of the European Central Bank Christine Lagarde acknowledged that the growing number of cases and new pandemic-related lockdowns across the region are disrupting economic activity, posing “serious risks” to the eurozone economy. |
| “Activity in the manufacturing sector continues to hold up well, but services sector activity is being severely curbed, albeit to a lesser degree than during the first wave of the pandemic in early 2020,” Lagarde said during a press conference after the ECB meeting. | “Activity in the manufacturing sector continues to hold up well, but services sector activity is being severely curbed, albeit to a lesser degree than during the first wave of the pandemic in early 2020,” Lagarde said during a press conference after the ECB meeting. |
| She also expressed concern over the slow vaccination roll-out across the EU amid the new Covid-19 strains. The regulator decided to keep interest rates and its wider stimulus programs unchanged after releasing additional support in December. | She also expressed concern over the slow vaccination roll-out across the EU amid the new Covid-19 strains. The regulator decided to keep interest rates and its wider stimulus programs unchanged after releasing additional support in December. |
| “In this environment ample monetary stimulus remains essential,” Lagarde said. | “In this environment ample monetary stimulus remains essential,” Lagarde said. |
| According to the ECB outlook, the eurozone’s GDP will grow 3.9 percent in 2021, and 2.1 percent in the next year. This is after a significant drop of 7.3 percent last year. The regulator added that the numbers are highly dependent on the outcome of the pandemic. | According to the ECB outlook, the eurozone’s GDP will grow 3.9 percent in 2021, and 2.1 percent in the next year. This is after a significant drop of 7.3 percent last year. The regulator added that the numbers are highly dependent on the outcome of the pandemic. |
| For more stories on economy & finance visit RT's business section | For more stories on economy & finance visit RT's business section |
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