Euro area – PMIs spread hope for 2025

The Composite Purchasing Managers' Index for industry and the services sector in the euro rose significantly from 49.6 to 50.2 points in January...

people___profile_24_outline
Dr. Vincent Stamer

Commerzbank Economic Research

01/24/2025

...exceeding market expectations. The index is still at a low level. However, the second rise in a row gives hope that the economy will pick up somewhat in the new year after a weak fourth quarter of 2024.

The Composite Purchasing Managers' Index for industry and the services sector rose from 49.6 to 50.2 points at the start of the year. This means that the sentiment indicator has risen for the second month in a row and is now in the range in which the euro area economy has usually grown moderately in the past. This gives us hope that the economy will pick up in the course of this year. However, in view of the continuing low level, the euro economy is likely to recover only slowly after a difficult winter half-year.

The positive development is likely to come primarily from France and Germany. The Composite PMI improved in France (from 47.5 to 48.3) and particularly strongly in Germany (from 48.0 to 50.1). As the index for the euro area rose to a lesser extent, the increase in the rest of the euro area is likely to have been significantly lower.

A look at the sectors shows that the manufacturing PMI in particular has risen (from 45.1 to 46.1), albeit from an extremely low level. This is a ray of hope for the European industry, which had fallen behind in international competition due to high energy prices. Services, on the other hand, fell slightly (from 51.6 to 51.4). Here, a decline in France offset the significant increase in the German services PMI.

For full text see attached PDF-Version.