Economic

growth in the euro zone

is slowing this month as the

omicron

variant increasingly affects the services sector, despite the fact that the manufacturing industry seems to recover slightly from the bottlenecks in the supply chains.

According to the flash indicator of the PMI index for Europe, published this Monday, "

the growth rate of total activity in January is proving to be the slowest

since the recovery after the confinements of early 2021 that began in

March of last year

".

The consultant warns, however, that this slowdown entails significant differences by sector. "

Service sector

activity growth

slowed sharply for the second month in a row, falling to

its lowest level since April last year

, amid rapidly rising

COVID-19 infection rates.

The rapid spread of the variant ómicron caused the reintroduction of many measures to contain the virus in recent weeks, especially in

Germany, France, Italy and Spain,

which in particular adversely affected companies oriented to the final consumer and hotels and restaurants", they explain.

Another problem caused by covid was that companies began to notice

staff absenteeism

, due to illness or isolation, which also affected the activity.

Tourism and leisure

especially slowed down

, at a rate not seen since February 2021, as well as work in the transport and media sectors.

good news from the industry

The

manufacturing industry

, however, experienced an acceleration as

supply problems have eased.

"Average lead times from suppliers lengthened by the most since January last year, with

fewer item shortages

reported and signs of

easing shipping delays

. Growth was recorded in all major sectors manufacturers, and even a second consecutive month of increase in production in the automotive sector".

Demand expanded, according to the index of new orders, although at the slowest pace in the last ten months.

"The arrival of new orders in the services sector slowed down to almost a standstill," they warn.

Prices continued to set records, despite the fact that the industry noted a smaller rise in the

prices

of inputs due to the relief in the ruptures of global chains.

In general terms, however, energy prices and the increase in labor costs were transferred to final prices.

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Know more

  • Coronavirus

  • Europe

  • Omicron variant

  • France

  • Italy

  • Spain

  • covid 19

  • economy

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