Eurozone's Private Sector Expansion Eases in December Amid New Order Slowdown

05:59 AM EST, 12/16/2025 (MT Newswires) -- Private sector growth in the euro area decelerated more than anticipated in December as a steeper decline in foreign demand restricted new order intakes, S&P Global and Hamburg Commercial Bank said Tuesday. The HCOB Flash Eurozone Composite PMI Output Index stood at a three-month low of 51.9 in December, compared with the previous 52.8 and the expected 52.7. The provisional reading was still above the neutral 50 threshold and reflected a sustained growth for an entire calendar year for the first time since the COVID-19 pandemic. Business activity in the services sector expanded at a slower pace, with the PMI falling to a three-month high of 52.6, against the previous month's 53.6 and the market forecast of 53.3. As for the manufacturing segment, production marginally dipped in December, breaking a nine-month expansion streak. The PMI hit an eight-month low of 49.2, compared with the 49.6 in November and the expected 49.9. "Economic growth slowed at the end of the year due to a slight contraction in the manufacturing sector and weaker momentum in the service sector. The weaker performance is primarily attributable to German industry, where the downturn intensified. Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said. "In France, on the other hand, there are signs of a cautious recovery in industry, although a single monthly figure should not be overrated. However, the service sector, which had expanded last month, is stagnating there, while Germany's service companies saw another solid rise in activity. All in all, the runway into the new year seems pretty unstable." In terms of prices, inflationary pressures intensified at year-end, with input and output costs rising at a faster pace compared with the previous month. De la Rubia noted that service-sector inflation reached a nine-month high in December, reinforcing the European Central Bank's expectations to keep rates unchanged at its Dec. 18 meeting, as wage-driven price pressure persists. Looking ahead, overall business confidence dropped to its lowest level in seven months, as waning optimism in services offset the improved outlook for manufacturing.