Industries such as retail, catering, aviation and tourism suffer greatly from severe COVID events in many European countries. According to the UK market researcher Markit, service sector activity in the euro area declined more than expected last month. The services sector in the euro area has been shrinking for four months in a row.

However, the contraction in December was considerably less than in November. Markit reports activity in the sector based on its purchasing manager index. The index for the euro area countries reached a final position of 46.4. At a level above 50, there is increasing activity, below which there is shrinkage. The decrease was now even more pronounced than had been reported in a preliminary measurement. In November, a position of 41.7 was measured, which was the lowest level since May.

In most major European economies, the contraction was more pronounced than when the provisional figures were published. In Italy, this decline was strongest, in France and the United Kingdom, the services sector was relatively well off with a minimal contraction. Spain managed to surprise with a much less strong contraction of activity than expected.

The composite index of services and industry in the euro area recorded a level of 49.1 for December. This means that economic activity in the euro area decreased slightly last month.