Euro zone businesses are about to mark their best quarter in 4-1/2 years but those in core economies report a slight loss of momentum running into year-end with still no sign of inflation picking up, PMI surveys show. Grace Pascoe reports.
It's almost time to celebrate for euro zone businesses. They're close to hiting their best quarter for four and a half years. That's according to data compiled by Markit - pointing to Q4 GDP growth of 0.4 percent. But Richard Hunter from Hargreaves Lansdowne thinks the euro zone is running on at least two different speeds. (SOUNDBITE) (English) HARGREAVES LANSDOWNE, HEAD OF EQUITIES, RICHARD HUNTER, SAYING: "Germany remains something of a powerhouse even in terms of the PMI flash. We have got services down but manufacturing up, so it is a fairly mixed picture again. On the upside employers are starting to hire staff at the highest level for the first time in four and a half years. Against that, output is also falling." Germany's private sector slowed in December- but remained at an overall high, With a flash composite PMI of 54.9. Over in France business activity slowed following November's terror attacks. Services dropping to 50 in the early flash estimate. The euro zone's composite Flash PMI for December slipped to 54.0 from November's 54.2. Leaving open the debate over whether the ECB will ease further. (SOUNDBITE) (English) HARGREAVES LANSDOWNE, HEAD OF EQUITIES, RICHARD HUNTER, SAYING: "Clearly on the sidelines the central bank is quite prepared to loosen monetary policy further if necessary, but in terms of the fact that you have got such a difference between the likes of Germany and some of the peripheral countries there is clearly still some way to go for the European region." It's a good year-end for manufacturers. Their PMI rose to a 20-month high of 53.1- with output also at a 20 month high at 54.4.