Investing.com – The euro zone's services sector unexpectedly expanded more than initially projected in January, rising to a five-month high, data showed on Thursday.
In a report, the market research group, Markit said the final euro zone services business activity index rose to 55.9 in January, following a preliminary estimate of 55.2.
Analysts had expected the index to remain unchanged at 55.2 in January.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
According to the data, the big-two economies of Germany and France recorded robust growth of both business activity and new work, as well as further job creation, which contrasted with the lackluster performances and job losses seen in Italy and Spain.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The resurgence in part reflected a bounce-back in business from severe weather in northern regions in December, but the three-month average in the rate of increase in activity was nevertheless the strongest since last September, suggesting some improvement in the underlying growth trend.”
He added, “However, the divergence between national service sector performance – ranging from near-record growth in Germany to minor contractions in Spain and Italy – looks likely to remain a headache for policymakers at the ECB in attempting to juggle rising inflation against the ongoing plight of struggling peripheral countries.”
Following the release of the data, the euro was down against the U.S. dollar, with EUR/USD shedding 0.07% to hit 1.3799.
Meanwhile, European stock markets were broadly lower. The EURO STOXX 50 slumped 0.67%, France’s CAC 40 plunged 1.07%, the FTSE 100 fell 0.47%, while Germany's DAX was down 0.36%.
In a report, the market research group, Markit said the final euro zone services business activity index rose to 55.9 in January, following a preliminary estimate of 55.2.
Analysts had expected the index to remain unchanged at 55.2 in January.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
According to the data, the big-two economies of Germany and France recorded robust growth of both business activity and new work, as well as further job creation, which contrasted with the lackluster performances and job losses seen in Italy and Spain.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The resurgence in part reflected a bounce-back in business from severe weather in northern regions in December, but the three-month average in the rate of increase in activity was nevertheless the strongest since last September, suggesting some improvement in the underlying growth trend.”
He added, “However, the divergence between national service sector performance – ranging from near-record growth in Germany to minor contractions in Spain and Italy – looks likely to remain a headache for policymakers at the ECB in attempting to juggle rising inflation against the ongoing plight of struggling peripheral countries.”
Following the release of the data, the euro was down against the U.S. dollar, with EUR/USD shedding 0.07% to hit 1.3799.
Meanwhile, European stock markets were broadly lower. The EURO STOXX 50 slumped 0.67%, France’s CAC 40 plunged 1.07%, the FTSE 100 fell 0.47%, while Germany's DAX was down 0.36%.