Eurozone PMI Rises to 47.3 in Dec., But Negative Pressure Expected on Q4 GDP

December 14, 2012 7:40 AM EST
U.S. markets are indicated for a higher open Friday amid more dour news out of Europe early.

Markit's Flash Composite Purchasing Manager's Index rose to 47.3 in December, besting views calling for a jump to 46.8. Though the number is a nine-month high for the index, it is the 11th straight month of contraction and has been above the key 50 point expansion level only once in the last 16 months.

One Markit analysts suggested that since GDP was lagging the index, a drop is likely in the fourth quarter. Currently, Markit sees GDP falling 0.5 percent for the three-months ended in December.

The 17-member euro zone is in a technical recession already, with second-quarter GDP dropping 0.2 percent and third-quarter ebbing 0.1 percent.

The EU might have some hope for recovery in the service sector. Market data points to marked cuts in charged rates in order to win business, though the same can't be said for the manufacturing segment. The Service PMI rose to 47.8, from 46.7 in November. In addition, new export orders rose to 46.8, a nine-month high for the metric.

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