Declining indicators dim eurozone recovery hopes
Source: Bloomberg News |
March 22, 2013, Friday
|
Print Edition
Print Edition
EUROZONE services and manufacturing output contracted more than economists estimated in March, adding to signs the currency bloc's economy is struggling to emerge from a recession.
A composite index based on a survey of purchasing managers in both industries fell to 46.5 from 47.9 in February, London-based Markit Economics said yesterday. Economists had forecast a reading of 48.2, according to the median of 23 estimates in a Bloomberg News survey. A reading below 50 indicates contraction.
The data "indicate that the eurozone economy has remained stuck in recession in the first quarter," said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. "With fiscal austerity, tight credit and high unemployment set to keep most peripheral economies in recession, the path back to growth will likely be slow and bumpy. Moreover, if the situation surrounding Cyprus spirals out of control the onset of recovery might well be delayed."
The eurozone economy has fallen for five straight quarters and is set to shed 0.1 percent in the first three months of 2013 before returning to growth, the median of 24 economists' estimates in a separate Bloomberg News survey shows. The European Central Bank forecasts the economy will slip 0.5 percent this year.
ECB President Mario Draghi said earlier this month that the euro region will gradually recover later in 2013 from its second recession in four years. Still, concerns of a possible bank collapse in Cyprus and political turmoil in Italy are roiling financial markets, and threaten to derail confidence.
The euro-area services index dropped to 46.5 in March from 47.9 in February, the data showed. The manufacturing gauge fell to 46.6 from 47.9.
German manufacturing output unexpectedly contracted in March. An index based on a survey of purchasing managers in the manufacturing industry of Europe's largest economy dropped to 48.9 this month from 50.3 in February, while a services gauge fell to 51.6 from 54.7, Markit said in a separate report.
A composite index based on a survey of purchasing managers in both industries fell to 46.5 from 47.9 in February, London-based Markit Economics said yesterday. Economists had forecast a reading of 48.2, according to the median of 23 estimates in a Bloomberg News survey. A reading below 50 indicates contraction.
The data "indicate that the eurozone economy has remained stuck in recession in the first quarter," said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. "With fiscal austerity, tight credit and high unemployment set to keep most peripheral economies in recession, the path back to growth will likely be slow and bumpy. Moreover, if the situation surrounding Cyprus spirals out of control the onset of recovery might well be delayed."
The eurozone economy has fallen for five straight quarters and is set to shed 0.1 percent in the first three months of 2013 before returning to growth, the median of 24 economists' estimates in a separate Bloomberg News survey shows. The European Central Bank forecasts the economy will slip 0.5 percent this year.
ECB President Mario Draghi said earlier this month that the euro region will gradually recover later in 2013 from its second recession in four years. Still, concerns of a possible bank collapse in Cyprus and political turmoil in Italy are roiling financial markets, and threaten to derail confidence.
The euro-area services index dropped to 46.5 in March from 47.9 in February, the data showed. The manufacturing gauge fell to 46.6 from 47.9.
German manufacturing output unexpectedly contracted in March. An index based on a survey of purchasing managers in the manufacturing industry of Europe's largest economy dropped to 48.9 this month from 50.3 in February, while a services gauge fell to 51.6 from 54.7, Markit said in a separate report.
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