The uncertain future of Europe in these latest data

Data from the Eurozone still paint a less than comforting economic picture.
Although improving slightly, the eurozone composite PMI, for example, remained in the contractionary zone in January.
After GDP narrowly avoided recession, the single currency region risks continuing 2024 with a still slow and weak recovery.
For this reason, the ECB has so far shown itself to be cautious about its next moves regarding interest rates.
There is an entirely European dilemma that challenges the Eurotower's choices: favor the drive for growth with a decrease in the cost of money, or still leave rates at a high level to avoid nasty surprises on the inflation side? The macro data affecting the Eurozone do not help to resolve the doubts.
What have the composite and services PMIs revealed and why does the climate remain rather gloomy regarding the European economic trend? Europe and growth: what do the latest data indicate? The eurozone economy showed only tentative signs of recovery at the start of the year, according to a survey that also highlighted growing inflationary pressures, strengthening the European Central Bank's case for keeping interest rates at record levels .
The HCOB composite PMI for the bloc, compiled by S&P Global and considered a good indicator of overall economic health, rose to 47.9 in January from 47.6 in December.
The figure is the best since July, although it remained below the threshold of 50 that separates growth from contraction.
read also Europe narrowly avoids recession in 2023.
And Italy? The PMI for the services sector fell to 48.4 from 48.8 in December.
The HCPB noted that there was a gap between North and South in this area, with a surprising reading: “Contrary to the general opinion that Southern European countries represent the weak link in the monetary union, these economies are currently performing relatively well.
This positive trend acts as a counterforce, partially mitigating declines in Germany and France.
Thanks to the resilience shown by Italy and Spain, the services PMI recorded only a marginal decline to 48.4, remaining close to the expansionary threshold of 50”.
Additionally, the survey indicated that both input and output costs rose faster last month.
The producer price index rose to an eight-month high of 54.2 from 53.8.
“The European Central Bank's hesitation to cut interest rates becomes clearer when you consider the surge in PMI price indices,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
read also Why the ECB is in crisis over rate cuts The data analysis also showed that business expectations have improved slightly, suggesting better times are ahead.
However, given the decline in new orders for seven consecutive months, an imminent recovery is unlikely according to HCOB.
For this reason, the future remains very uncertain for the Eurozone.
And for the ECB.