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Trade activity in the euro area has slowed after restrictions to tackle the surge in coronavirus infections hit the service sector, as signs emerged that supply bottlenecks have subsided. mitigated, an investigation showed.

The IHS Markit Eurozone Purchasing Managers’ Flash Composite Index, a monthly survey that takes the pulse of business activity, fell more in December than most economists expected a low of nine months to 53.4, compared to 55.4 the previous month.

A number of countries have recently announced tougher coronavirus measures, including Germany, Italy, Austria and the Netherlands. The restrictions reduce the flow of customers into the service sector, especially restaurants and shops.

While the PMI score for the services sector remained above 50, indicating that a majority of companies report higher activity levels than a month ago, the slowdown in services growth has been more marked only for manufacture, according to IHS.

Companies have reported improving global supply chain problems that have caused backlogs at factories, congestion at ports and shortages of materials, helping manufacturers report the biggest increase in production since September.

“The eurozone economy is taking another hard hit from Covid-19,” said Chris Williamson, chief economist at IHS Markit.

German companies reported a slowdown in activity and their first decline in new orders for goods and services since June 2020, as the PMI score fell to an 18-month low at 50.

The situation was more favorable in France, where companies reported a slight slowdown in growth and IHS Markit said that “a relatively resilient service sector helped offset a decline in manufacturing output for the second time in recent years. last three months ”.

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