Stat of the Day II: Europe PMI Shows Surprising Jump

The euro-wide composite index of purchasing managers in both services and manufacturing industries improved in January. What? Thought Europe was in a deep recession. Now we're already hearing talk of the downturn bottoming out.

The composite index rose to 50.4, a five month high, from 48.3 in December according to Markit Economics. Naturally this wasn't an overly robust report and the gain was partially from a reduction in order backlog. 

Both sectors saw improvement though the services index was the only one above 50 or signalling growth at 50.5. Manufacturing was still declining but at a slower rate.

More importantly is that German manufacturing responded to a lower Euro with growth for the first time in four months.

Sure this doesn't mean that Europe is out of the woods already, but the debt crisis clearly isn't having as negative of an impact on 2012 business as most predicted when the year started.

Per Businessweek article:

• A euro-area composite index based on a survey of purchasing managers in both industries rose to 50.4, a five-month high, from 48.3 in December, London-based Markit Economics said in a report today.
• There is “tentative evidence suggesting that the downturn in the euro zone as a whole may be gradually bottoming out,” said Martin Van Vliet, an economist at ING Group in Amsterdam.
• A gauge of euro-region manufacturing rose to 48.7 from 46.9, Markit said. A measure of services climbed to a five-month high of 50.5 from 48.8. Indexes of new business and backlogs fell in both industries.
• German manufacturing expanded in January for the first time in four months and services growth accelerated, according to a separate release from Markit. The composite index of both industries reached a seven-month high.

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