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Faster decline in eurozone services and factory due to deep recession
Source: Bloomberg News |
February 22, 2013, Friday
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Print Edition
Print Edition
EURO-AREA services and manufacturing contracted at a faster pace than economists forecast in February as the economy struggled to recover from the deepest recession in almost four years.
A composite index based on a survey of purchasing managers in both industries in the 17-nation currency bloc fell to 47.3 from 48.6 in January, London-based Markit Economics said yesterday. Economists had forecast a reading of 49, according to the median of 22 estimates in a Bloomberg News survey. Germany's services measure fell more than forecast to 54.1, while its factory gauge rose above 50, signalling growth in that industry.
The data reinforce indications that the eurozone economy continued to contract in early 2013 after the recession worsened in the fourth quarter. The European Central Bank forecasts gross domestic product will decline 0.3 percent this year.
"When you're in the midst of the recession, and some would argue, a depression in some places like Greece, it's hard to be optimistic," Robert Savage, chief strategist at New York-based currency fund FX Concepts, said yesterday in a Bloomberg Television interview, "The PMI data are highlighting the problem."
The euro-area services index fell to 47.3 in February from 48.6 in January, its steepest drop in 10 months, the data showed. The manufacturing gauge slipped to 47.8 from 47.9. Markit will publish the final reading for the factory index on March 1 and the services and composite measures on March 3.
In Germany, Europe's biggest economy, the services measure fell to 54.1 in February from 55.7 last month, the sharpest decline since August. The German manufacturing gauge rose to 50.1, expanding for the first time in a year. France's services gauge fell to 42.7 this month from 43.6 in January, while its manufacturing index increased to 43.6 from 42.9, the data showed.
"The information in business surveys currently reveals that the growth impetus in Europe is nearly exclusively coming from foreign demand, a growth engine that might still be hampered by an appreciating exchange rate," said Peter Vanden Houte, an economist at ING Bank NV in Brussels. "And even if we assume that the euro's appreciation is largely behind us, net exports alone are insufficient to lift growth above zero percent in 2013."
A composite index based on a survey of purchasing managers in both industries in the 17-nation currency bloc fell to 47.3 from 48.6 in January, London-based Markit Economics said yesterday. Economists had forecast a reading of 49, according to the median of 22 estimates in a Bloomberg News survey. Germany's services measure fell more than forecast to 54.1, while its factory gauge rose above 50, signalling growth in that industry.
The data reinforce indications that the eurozone economy continued to contract in early 2013 after the recession worsened in the fourth quarter. The European Central Bank forecasts gross domestic product will decline 0.3 percent this year.
"When you're in the midst of the recession, and some would argue, a depression in some places like Greece, it's hard to be optimistic," Robert Savage, chief strategist at New York-based currency fund FX Concepts, said yesterday in a Bloomberg Television interview, "The PMI data are highlighting the problem."
The euro-area services index fell to 47.3 in February from 48.6 in January, its steepest drop in 10 months, the data showed. The manufacturing gauge slipped to 47.8 from 47.9. Markit will publish the final reading for the factory index on March 1 and the services and composite measures on March 3.
In Germany, Europe's biggest economy, the services measure fell to 54.1 in February from 55.7 last month, the sharpest decline since August. The German manufacturing gauge rose to 50.1, expanding for the first time in a year. France's services gauge fell to 42.7 this month from 43.6 in January, while its manufacturing index increased to 43.6 from 42.9, the data showed.
"The information in business surveys currently reveals that the growth impetus in Europe is nearly exclusively coming from foreign demand, a growth engine that might still be hampered by an appreciating exchange rate," said Peter Vanden Houte, an economist at ING Bank NV in Brussels. "And even if we assume that the euro's appreciation is largely behind us, net exports alone are insufficient to lift growth above zero percent in 2013."
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