EUROZONE DATA: Final Q4 GDP Upward Revision; Investment Remains Problematic

Eurozone PPI in December was stable at 0.0% Y/Y, making it marginally above expectations (-0.1% consensus, -1.2% prior). This is the first non-deflationary print since April 2023 driven by energy base effects working their way out of the Y/Y figure. Note that excluding energy the PPI index has remained unchanged since September 2024, whereas including energy it has been increasing.

• Three of the five sub-components saw Y/Y pickups, and the remaining two remained stable.
• Energy producer prices fell at a softer pace of 1.7% Y/Y (vs -5.1% in Nov and -11.2% in Oct).
• Intermediate goods rose a marginal 0.1% Y/Y (vs a decline of 0.3% in Nov).
• Capital goods and non-durable consumer goods sustained their November pace of increase of 1.4% Y/Y and 2.0% Y/Y.
• On a sequential basis, PPI was touch softer than expected at 0.4% M/M (vs 0.5% consensus, 1.7% revised prior from 1.6%).

The downward revision to the French January services PMI (48.2 vs 48.9 flash) meant the Eurozone-wide services reading was 51.3 (vs 51.4 flash, 51.6 prior). 

• “January survey data indicated an improvement in demand conditions for eurozone services companies as new orders rose for a second month in a row”.
• “Sales growth was domestic driven as the latest survey data showed new export business decreasing, albeit more slowly”.
• “Inflation remained stubborn in January. Operating costs for services companies rose at the steepest pace in nine months, although selling price inflation held steady”.
• However, of the four major Eurozone countries, only the French PMI signalled that firms were not passing on input cost increases to output charges.

The composite PMI marked a second consecutive increase to 50.2 (in line with flash, vs 49.6 prior). Against a backdrop of concerns around US tariffs, “A marked drag on sales came from exports”.

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