Falling eurozone activity heightens recession fears
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Business activity in the eurozone has slipped back into contraction, exacerbating fears the region will be unable to avoid recession.
The Markit eurozone purchasing managers’ index (PMI) dropped to 49.7 points in February, down from the 50.4 recorded in the previous month. Any reading below 50 indicates contraction.
Although February’s reading is the second-highest in six months, the index shows output dropped in all countries apart from France and Germany. Manufacturing activity rose marginally, although the larger service sector returned to contraction.
Ben May, European economist at Capital Economics, says: “February’s fall in the eurozone PMI puts a bit of a dent in hopes that Q4’s economic contraction will prove to be a one off.”
Howard Archer, chief European economist at IHS Global Insight, adds that the PMI’s fall “highlights the fact that the eurozone is far from out of the economic woods and faces a hard slog to get back to sustained growth”.
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