The euro zone manufacturing PMI was just above the 50.0 level signalling a marginal improvement in business conditions,

High oil prices are hitting costs and forcing manufacturers to look at how they can streamline their operations. Manufacturers are still shedding workers despite seeing output and orders increase.

In Germany, output prices are remaining very subdued and it's a suggestion that German companies are being more competitive than companies in, say, France and Italy on price, and therefore winning more business abroad.

Slower than expected sales growth over the course of the year led to a trimming of marketing spend compared to that originally budgeted for the year. Companies are clearly entering 2006 in a more cautious mood than in recent years.

It's hard for me to describe. If I could tell you what I couldn't see then I would see it.

It's not just one index improving. We've got output, new orders, exports, employment and purchasing all rising at faster rates and all at levels not seen for over five years.

As we saw last month, there were signs of increased overseas spending on UK services.

This is quite unusual and it's a very promising result.

That's great for corporate profitability. It will cause concerns for the European Central Bank, however.

Primarily, we suspect this is an oil price-induced global downturn that is hitting export growth. Secondly, there has been some evidence of demand cooling in China.