Eurozone Services PMI Revised Lower

The HCOB Flash Eurozone Services PMI decreased to 51.9 in January 2026, the lowest in four months, from 52.4 in December and below forecasts of 52.6. The reading signalled a slowdown in services-sector growth, with staffing levels flat after nearly five years of continuous job creation. Meanwhile, charge inflation accelerated to its sharpest pace in 11 months, even as business confidence improved. Services activity in Germany expanded at a fairly robust pace, while in France service companies slipped into contractionary territory. This may be linked to the political difficulties in finalising the 2026 budget.

The HCOB Eurozone Services PMI eased to 52.4 in December 2025, revised lower from an initial estimate of 52.6 and from 53.6 in November, marking the slowest expansion in three months. New business rose at the weakest pace in three months, with gains confined to domestic markets as new export orders fell at the sharpest rate since September 2025. Despite slower order growth, employment expanded at a stronger pace, extending the current hiring streak as firms sought to support capacity and service levels. Outstanding business declined more rapidly, indicating reduced pressure on workloads. On the price front, cost pressures intensified, with input cost inflation accelerating and firms raising selling prices at an above-average pace. Meanwhile, business confidence among service providers weakened to a seven-month low, as concerns over demand conditions and the broader economic outlook weighed on sentiment heading into the new year.

The HCOB Eurozone Services PMI slipped to 52.6 in December 2025 from 53.6 in November, marking the slowest expansion in three months, according to flash estimates. Services activity continued to grow for a seventh consecutive month and remained the main driver of overall euro area expansion, though momentum softened toward year-end. New order growth moderated amid a sharper decline in business from abroad, while firms continued to hire for a third straight month, reflecting still-resilient demand conditions. Companies further reduced outstanding workloads, with backlogs falling at the quickest pace in three months. On the price front, input cost inflation strengthened to a nine-month high, led by services, while output price inflation remained modest and only slightly higher than in November. Business confidence weakened notably among service providers, slipping to the lowest level since May as outlook concerns, particularly in Germany, weighed on sentiment heading into the new year.