Eurozone economic growth slows as Omicron hits services
By Maria Martinez
Eurozone business growth slowed for a second consecutive month in January as the spread of the Omicron variant increasingly weighed on the region’s economy, according to IHS Markit.
The eurozone composite PMI fell to 52.4 in January from 53.3 in December, according to the flash estimate. The latest reading indicates the slowest rate of output growth since the recovery began from the lockdowns in March 2021.
Although an easing of supply chain delays has boosted manufacturing output, new restrictions have led to a marked slowdown in service sector growth, according to IHS Markit.
“The Omicron wave led to a further sharp decline in spending across many consumer-facing services earlier this year, with tourism, travel and leisure particularly hard hit,” said Chris Williamson, chief economist at IHS Markit. .
The eurozone services PMI fell to 51.2 in January from 53.1 in December, while the manufacturing PMI rose to 59.0 in January from 58.0 in December.
“Not only has the easing of the supply shortage helped factories increase production, but cost pressures in manufacturing have also eased,” Williamson said.
As average prices charged for goods and services rose at a record pace, a slowdown in producer input cost inflation hinted at cooling upward pressures on commodity prices, according to IHS. markit.
Write to Maria Martinez at [email protected]