Survey suggests eurozone economy set for robust year

Markit said the report together with its latest surveys of manufacturing and construction indicates the economy grew 0.5 percent in the final quarter of the year, down from the 0.6 percent it estimated last month.

The Markit report showed that a solid measure of new business was offset by the weakest pace of job creation in the sector since July, while long-term expectations for business activity among firms were the lowest since 2013. The Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) registered 57.8 in December, up from a seven-month low of 55.3 in November.

Williamson said factors such as government spending cuts, a potential interest rate hike, uncertainty about the global economy and the prospect of a referendum on Britain’s membership of the European Union posed “significant downside risks” to economic growth this year.

In an interview with Belgian weekly magazine Knack published on Wednesday, ECB chief economist Peter Praet said he sees no alternative to pursuing the bank’s current stimulus program even though it hasn’t yet succeeded in bolstering inflation. “If you print enough money, you will always get inflation”.

However, economists have noted contrasting signals from the PMI readings of the construction sector and data used in official growth figures. That, according to Markit, monthly growth rounded off the best quarterly performance since the middle of 2011. Given that we have seen nearly a year’s worth of quantitative easing, there is a concern that policy is proving somewhat ineffectual.

David Noble, group CEO, CIPS, said: “With increased business margins as a result of ongoing lower fuel and commodity prices, wages were up”.

Insee said its index of household confidence was unchanged at 96 in December, above the 95 level that most economists were expecting.

German Services PMI was also released, which came in at 56.0 in Dec 2015, up from the last reading of 55.4.

As has been the case since September, employment numbers were marginally down in December.

Nonetheless, whereas levels of activity in Germany, Italy and Spain – three of the currency bloc’s largest economies – continued to be solid, France’s service sector PMI for December was revised lower from 50.3 to 50.1.