Euro zone inflation stuck at 3% in NovemberThursday 15 December 2011 13.18
Euro zone inflation hit 3% for the third month in a row in November, the EU said today with detailed data showing transport, energy and housing were the main upward drivers.
The annual rates of price rises dipped in Germany, Italy and Spain although the percentage for France rose slightly in November, the Eurostat agency's tables showed.
Of the four big euro zone economies, only Italy was pegged at a rate above the euro zone average -3.7% for Rome. The highest euro zone rate was in Slovakia, at 4.8%, and the lowest in Slovenia, 2.1%.
Some light in gloom over euro zone business - PMI
Euro zone manufacturing and services activity shrank rapidly in the last quarter of the year but the outlook steadied in Germany and France in December, a key survey of trends showed today.
Private sector activity in both services and manufacturing shrank for the fourth month in a row in December, marking the worst quarter for two and a half years but the slowdown eased for a second month, the Markit survey of leading indicators showed.
Manufacturing output by euro zone powerhouse Germany rallied after a fall in November as the downturn in France slowed "to a marginal pace." The purchasing managers' index (PMI), compiled by private organisation Markit, noted also that the rate of decline eased in December.
The survey monitors sentiment among purchasing managers in the private sector and is a closely watched indicator business activity trends. It is of particular significance now, given the euro zone debt crisis and the uncertainty dragging down business confidence, adding to the risks of recession.
"The euro zone suffered its worst quarter for two and a half years in the final three months of 2011, with the PMI data suggesting that the region's economy is likely to have contracted by 0.6%," Markit chief economist Chris Williamson said.
However "a slight easing in the rate of contraction for the second month in a row in December provides some hope that the rate of decline may weaken further as we move into the new year. But he said that another quarter of decline can not be ruled out."
The survey revealed a widening gap in performance in the euro zone. Germany probably stagnated in the fourth quarter despite a return to growth in December and France steadied but in other euro zone countries "the rate of contraction remained steep."
Markit said that its composite output index "signalled contraction for the fourth successive month in December," on an preliminary estimate. But "the index rose from 47 in November to 47.9, indicating an easing in the rate of decline for the second month in a row and the smallest fall in output for three months."
It said that its research indicated that "manufacturing output fell for the fifth successive month, while services activity dropped for the fourth month. In both cases the rate of decline eased."
But new orders in the manufacturing sector "fell particularly steeply again, dropping at a rate only slightly weaker than November's two-and-a-half-year record."
Markit said that German manufacturing output had signalled "modest growth" which reversed a decline in November. Excluding Germany and France, euro zone activity fell sharply and only slightly slower than previously.
The organisation said that expectations for growth in the services sector in the coming year "remained very weak." The outlook in Germany was neutral and improved optimism in France was offset by a steep drop in expectations in other countries to the lowest since February 2009.