Today's sentiment indicators point to a further slight downturn in the EMU economy at the beginning of the year. The combined purchasing managers' index for industry and services in the eurozone fell from 51.1 to 50.7 points in January, the lowest level since July 2013. In our view, the main reasons for the renewed slowdown in economic growth are elevated political and economic risks associated with Brexit, trade, political protests in France and problems in the automotive sector. In view of further deterioration in key PMI sub-indices such as total new orders and job creation and  subdued business prospects within the next 12 months, it is unlikely that economic momentum will pick up markedly in the coming months.

At country level, the survey results varied considerably at times. In Germany, there were signs of a slight recovery in growth momentum in January as a result of a revival in the services sector. However, in view of declining order intake and sluggish employment growth, we interpret this development as a mild countermove or stabilization rather than the beginning of a new sustainable upward trend. By contrast, the French purchasing managers' index for industry and services fell more sharply in January than at any time in the past four years, from 48.7 to 47.9 points. The economic repercussions of the political protests of the "yellow vests" are playing a decisive role here, but the global economic slowdown is also increasingly weighing on the French economy. In the remaining eurozone countries, economic momentum measured by the PMI index in January was the weakest since late 2013.

In view of the disappointing economic development around the turn of the year, our 2019 GDP growth forecast for the eurozone of 1.6% for 2019 is standing on shaky ground.