Eurozone recovery remained on track at the end of 2010, with core Germany and France offsetting weakness in peripheral nations, a closely watched survey showed Wednesday.
At 55.5, the final Markit Composite Output Index remained unchanged from November's three-month high and stayed above the earlier flash estimate of 55.
The headline index is now consistent with Eurozone GDP rising at a quarterly rate of around 0.5% in the final three months of 2010, Markit said.
The Purchasing Managers' Index for the manufacturing sector came in at 57.1, the highest since April's 46-month peak. Meanwhile, the services PMI fell to 54.2 from November's three-month high. This was bigger than the flash estimate of 53.7, but signaled an easing in the rate of expansion.
Output growth in manufacturing accelerated to a five-month high in December, while expansion slowed in services. Germany and France remained the principal drivers of the recovery.
Eurozone new business improved at the fastest pace for eight months in December, as order inflows strengthened at both manufacturers and service providers. The trend in manufacturing new export orders showed a broad-based acceleration in December.
In the labor market, the survey showed employment increasing for the eighth month running. Jobs growth was led by a near survey record rate of increase in Germany and a further solid rise in France.
While factory gate prices in the manufacturing sector rose at the fastest rate since August 2008, service sector charges advanced slightly for the first time since October 2008.
Among the big-four nations in the euro area, Germany and France experienced robust expansions in the service sector.
Germany's service sector posted steady growth in December, with the business activity index recording a score of 59.2, unchanged from the thirty-nine month high of November. French service sector activity also rose at a robust pace despite poor weather conditions, but the PMI reading fell slightly to 54.9, the survey showed.
Meanwhile, activity in the Spanish service sector contracted at a faster pace at the end of 2010 and Italy's services activity growth slowed more than expected in December to near stagnation.
Going forward, the concern is that Eurozone economic activity will be pressurized increasingly by fiscal tightening kicking in across the region, noted IHS Global Insight economist Howard Archer. In addition, recurrent sovereign debt tensions could impact negatively on confidence and activity.
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