Investing.com – Manufacturing activity in the euro zone improved more-than-expected in January, gaining at the fastest pace since August, preliminary data showed on Tuesday.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index rose by 1.8 points to a seasonally adjusted 48.7 in January from a reading of 46.9 in December.
Analysts had expected the index to ease up by 0.5 points to 47.4 in January.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The report showed that service sector activity in the euro zone improved to a five-month high in January.
The preliminary services purchasing managers’ index rose by 1.7 points to a seasonally adjusted 50.5 from 48.8 last month. Analysts had expected the index to rise by 0.3 points to 49.1.
Output rose at a robust pace in Germany, which saw the largest increase for seven months, and a modest expansion (the first growth for four months) was also reported in France.
In contrast, output continued to fall across the rest of the region as a whole, dropping for the eighth successive month.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The euro zone economy appears to have stabilized in January, showing a marginal increase after a 0.5-0.6% contraction in gross domestic product in the final quarter of last year.”
He added that, “The improvement largely reflected an upturn in Germany and very modest growth in France. The rest of the region continued to undergo a steep downturn, though even here the average rate of decline eased.”
Following the release of the data, the euro added to gains against the U.S. dollar, with EUR/USD rising 0.2% to trade at 1.3040.
Meanwhile, European stock markets remained lower. The EURO STOXX 50 declined 0.5%, France’s CAC 40 shed 0.5%, London’s FTSE 100 fell 0.4%, while Germany's DAX dropped 0.45%.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index rose by 1.8 points to a seasonally adjusted 48.7 in January from a reading of 46.9 in December.
Analysts had expected the index to ease up by 0.5 points to 47.4 in January.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The report showed that service sector activity in the euro zone improved to a five-month high in January.
The preliminary services purchasing managers’ index rose by 1.7 points to a seasonally adjusted 50.5 from 48.8 last month. Analysts had expected the index to rise by 0.3 points to 49.1.
Output rose at a robust pace in Germany, which saw the largest increase for seven months, and a modest expansion (the first growth for four months) was also reported in France.
In contrast, output continued to fall across the rest of the region as a whole, dropping for the eighth successive month.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The euro zone economy appears to have stabilized in January, showing a marginal increase after a 0.5-0.6% contraction in gross domestic product in the final quarter of last year.”
He added that, “The improvement largely reflected an upturn in Germany and very modest growth in France. The rest of the region continued to undergo a steep downturn, though even here the average rate of decline eased.”
Following the release of the data, the euro added to gains against the U.S. dollar, with EUR/USD rising 0.2% to trade at 1.3040.
Meanwhile, European stock markets remained lower. The EURO STOXX 50 declined 0.5%, France’s CAC 40 shed 0.5%, London’s FTSE 100 fell 0.4%, while Germany's DAX dropped 0.45%.