Eurozone Private Sector Growth Softens

(RTTNews) - The euro area private sector grew for a twelfth consecutive month in December but the pace of growth softened to a three-month low on weaker demand for goods and services, final survey data from S&P Global showed on Tuesday.

The HCOB final composite output index dropped to 51.5 in December from November's 30-month high of 52.8. The reading was also below the initial estimate of 51.9.

Despite the slowdown in growth, the average score for the final three months of 2025 was the highest since the second quarter of 2023.

The final services Purchasing Managers' Index posted 52.4 in December, down from November's two-and-a-half-year high of 53.6 and below the flash score of 52.6.

"In 2026, the service sector should remain on a moderate growth path," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

"The manufacturing sector is likely to benefit from higher demand for defence equipment and construction machinery, which are needed, among other things, to implement infrastructure projects in Germany," the economist said.

"As a result, economic growth of well over 1 percent should be possible again, but is certainly not overwhelming," added de la Rubia.

Growth momentum was lost in the most of the eurozone constituents except Spain, where private sector business activity grew at a sharper pace than in November.

Germany's private sector growth slowed to a four-month low in December. The composite index posted 51.3, down from 52.4 in November and the initial score was 51.5. The services PMI slid to 52.7 from 53.1 in the prior month and came in slightly below the estimate of 52.6.

France stagnated in December, failing to maintain growth after a renewed expansion in November. The composite PMI registered 50.0 in December compared to 50.4 in November. The initial reading was 50.1.

The services PMI slid to 50.1 from 51.4 in the previous month. The score was marginally below the flash estimate of 50.2.

Italy managed only a marginal upturn that was its slowest in nearly a year. At 50.3, the composite output index retreated from November's over two-and-a-half year high of 53.8. The services PMI declined to 51.5 from 55.0, which was the highest in more than two-and-a-half years.

Spain's private sector continued to expand in December, extending the current growth trend to 25 months. The composite output index climbed to 55.6 from 55.1 in the previous month.

The service sector growth was the highest in 2025 overall. The PMI registered 57.1, up from 55.6 in the previous month.