A rise in Eurozone business activity in December completed a full calendar year of growth for the first time since the COVID-19 pandemic, according to provisional PMI survey data.

That said, the latest expansion in output was modest and the slowest in three months. New order growth also softened amid a sharper reduction in new business from abroad, but companies took on extra staff for the third consecutive month.

Business confidence waned amid much weaker sentiment among service providers which outweighed an improved outlook for manufacturing. On the price front, rates of input cost and output charge inflation strengthened at the end of the year.

The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index, based on approximately 85% of usual survey responses and compiled by S&P Global, dipped to 51.9 in December, down from a final reading of 52.8 in November but still above the 50.0 no-change mark and therefore signalling a further monthly expansion in business activity at the end of 2025.

The modest increase in December meant that business activity rose in each month of 2025. Prior to this year, the last time output expanded in each month of a calendar year was 2019.

As was the case with regards to business activity, new orders increased modestly in December, and at a softer pace than in November. Nonetheless, the latest expansion was the fifth in as many months.

New export orders (which include intraEurozone trade) continued to fall, and the latest reduction was the sharpest since March. New business from abroad decreased more quickly in manufacturing than in services.

For the third month running, employment increased across the Eurozone's private sector in December. Companies were again able to reduce their backlogs of work in December, extending the current sequence of depletion to 33 months.

Eurozone manufacturers cut their purchasing activity solidly in December, and at the fastest pace since March. In turn, stocks of purchases were also down, while suppliers' delivery times lengthened to the largest extent since October 2022.

There were marked differences in changes in business sentiment between the two monitored sectors in December.

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