FX.co ★ Eurozone Private Activity Expands at Steady Pace

The HCOB Flash Eurozone Composite PMI held steady at 51.5 in January 2026, unchanged from the previous month and slightly below market projections of 51.8. This indicates a temporary stabilization in private sector activity within the euro area. Growth was primarily driven by the services sector, though it did experience a slowdown (51.9 compared to 52.4 in December 2024), while manufacturing output saw a return to expansion, rising to 50.2 from 48.9. Aggregate new orders increased for the sixth consecutive month, but the rate of growth was at its slowest in four months, hindered by a decline in export orders. Despite the increase in output and new business, companies marginally reduced their employment levels, largely impacted by decreased employment in Germany. On the pricing front, input cost inflation surged to an almost yearly high, causing output charges to accelerate to their highest level since April 2024. Looking ahead, business sentiment reached a 20-month high, fueled by increased optimism among manufacturers.