Tightening and extending lockdowns in European countries has resulted in further shrinkage in the service sector. This category includes catering and shops, which accounts for almost three quarters of the entire economy of the euro area countries. Therefore, it is almost certain that there will be a new recession in the euro zone, will, states chief economist, Chris Williamson, from the British research firm Markit.

“A double dip for the euro area economy seems increasingly inevitable”. According to Williamson, production continued to decline in January, mainly due to the deterioration in the service sector.

The measure of market activity in the services sector went down to 45 in January, from 46.4 in December. Every figure below 50 points to shrinkage, above that to growth. It is the fourth month of shrinkage in the service sector.

The decline in services in Germany, the largest economy in the euro area, was slightly less severe. The country announced last week that the current lock-down measures will remain in place until at least 15 February. In France, where a stricter curfew was introduced, the decline was much stronger.

The growth of industry in the euro area is offset by the damage that service providers are suffering. The Markit index for industrial activity was 54.7, compared with 55.2 in December.

However, researcher Williamson is also gloomy about the industry. It was the weakest growth in this sector in the last seven months, he points out. ECB president Christine Lagarde stated on Thursday in her explanatory statement to the interest rate decision that there are many signs of industrial recovery.