That said, the expansion slowed to the weakest since last September, indicating a loss of momentum as 2025 drew to a close. A slower rise in demand for euro area goods and services was a headwind in December, although backlogs of work were cleared at a faster rate and employment growth ticked up.

Meanwhile, input cost inflation quickened to a nine-month high, reflecting a broad-based uplift in price pressures at the sector level, but the pace of increase in output charges was unchanged from November.

The seasonally adjusted HCOB Eurozone Composite PMI Output Index fell from November’s 30-month high of 52.8 to 51.5 in December. Despite the slowdown in growth, the average for the final three months of 2025 (52.3) was the highest since the second quarter of 2023.

The HCOB Eurozone Services PMI Business Activity Index signalled a seventh successive monthly expansion in services output during December. Posting 52.4, the index indicated growth that was broadly in line with the survey average. That said, this was down from November’s two-and-a-half-year high of 53.6 and pointed to a slowdown at the end of 2025.

Euro area services companies closed out the final quarter of the year with further sales growth, continuing the upward trend in new business that began last August.

The rise was the softest in three months, however. Gains were limited to domestic markets, data suggested, as new export business fell at the sharpest pace since September 2025.

Service sector employment growth nevertheless improved and backlogs of work were cleared at a quicker rate. Cost pressures intensified, with operating expenses continuing to increase at a pace that exceeded the survey average.

This was also true for output charges. In terms of the outlook, eurozone service providers expect activity levels to increase over the forthcoming 12-month period. Optimism faded, however, dipping to a seven-month low.