The

omicron

variant

spreads across the European continent and has already put

the services sector

in check

and, in particular, has stopped the recovery of

tourism

and

leisure and entertainment companies

-such as hospitality-, as reflected in the

published

PMI index

this Thursday, which is at its lowest since April.

Although this indicator remains above the 50 point level, which marks the difference between expansion and contraction in any sector, it has dropped from 55.9 in November to 53.3 in December.

"

The rate of economic growth in the euro zone slowed down

in December due to the fact that the

increase in the number of covid-19 cases

affected the activity of the services sector," explains consulting firm Markit.

The slowdown in services was determined by "the

sharp drop in activity in the tourism and leisure subsectors,

of a similar magnitude to the declines observed at the beginning of the year, amid growing cases of covid-19 and the associated restrictions in All Europe".

The expansion of the virus and the uncertainty about the protection offered by

vaccines

also impacted on

new orders in the sector

, which fell to their lowest since May, when the recovery from the confinements imposed in early 2021 began.

"

The euro zone economy is taking yet another hit from COVID-19

as rising levels of cases hamper growth, especially in the services sector, causing disappointing results by the end of 2021.

Germany

is taking a particularly hard hit. tough and

its economy has stagnated for the first time in a year and a half

, but the slowdown in growth is widespread throughout the region, "laments

Chris Williamson

, chief economist at the firm.

Relief in the manufacturing industry

Faced with this unfavorable evolution of the services sector, the manufacturing industry is improving this month compared to November, in part due to the relief that is taking place in the

shortage of supplies.

Manufacturing production expansion accelerated and industrial sector production

outpaced service sector activity

for the first time in five months, although it remained well below the growth rates observed at the beginning of the year.

"Although manufacturers indicated a weakening in new order growth, December saw the largest

expansion in production

since last September thanks to reduced supply problems," they say.

In December,

backlogs

in chains continued, but they have not seen significant increases, hence the activity of buying stocks has increased at the fastest pace since August.

As these disruptions improved,

inflationary pressures eased

compared to previous months, but the rise in prices paid by industries was the second largest in the series.

"The companies commented that the

increase of the costs of the maritime transports

, of the prices of the energies and of the labor costs again pushed the prices to the rise", they admit.

The projections for

2022

are not without

risks

: "looking to the future, the omicron variant poses new downside risks to growth prospects as we enter 2022, and should new problems arise from the pandemic in the supply chains. supply, price pressures could intensify again. "

According to the criteria of The Trust Project

Know more

  • Coronavirus

  • Europe

  • Omicron variant

  • Covid 19

  • sightseeing

  • economy

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