Signs of faltering eurozone recovery
Source: Bloomberg News |
August 24, 2011, Wednesday
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Print Edition
Print Edition
EUROPEAN services and manufacturing growth held steady over the past month at the slowest pace in almost two years, adding to signs the eurozone's recovery is losing momentum as the sovereign debt crisis persists.
A composite index based on a monthly survey of eurozone purchasing managers in both industries remained at 51.1, London-based Markit Economics said yesterday, the lowest since September 2009. Economists forecast a drop to 50, the median of 15 estimates in a Bloomberg News survey. A reading above 50 indicates growth.
"It is some light amid all the gloom, but we are not out of the woods yet," said Martin van Vliet, senior economist at ING Bank in Amsterdam. "It reduces fear of an imminent recession, but growth will flatline for the rest of the year."
Europe's economy may struggle to gather strength as governments from Italy to Spain step up budget cuts to fight the debt crisis.
Pledges of 365 billion euros (US$525 billion) in official loans to Greece, Portugal and Ireland, and 110.5 billion euros of bond purchases by the European Central Bank have failed to fix the finances of those countries or prevent -speculative attacks on Spain and Italy.
The eurozone gross domestic product expanded 0.2 percent in the second quarter after a 0.8 percent gain in the previous quarter, the worst performance since the region emerged from recession in late 2009. In Germany, Europe's largest economy, growth has almost stalled.
Markit's survey indicated the eurozone services indicator has slipped to 51.5 from 51.6 in July's survey. The manufacturing gauge dropped to 49.7, indicating a contraction.
In Germany, the manufacturing index held steady at 52, while services dipped to 50.4, a 25-month low, Markit said.
France's manufacturing gauge dropped to 49.3, indicating a contraction, from 50.5 a month earlier, while services climbed to 56.1 from 54.2.
A composite index based on a monthly survey of eurozone purchasing managers in both industries remained at 51.1, London-based Markit Economics said yesterday, the lowest since September 2009. Economists forecast a drop to 50, the median of 15 estimates in a Bloomberg News survey. A reading above 50 indicates growth.
"It is some light amid all the gloom, but we are not out of the woods yet," said Martin van Vliet, senior economist at ING Bank in Amsterdam. "It reduces fear of an imminent recession, but growth will flatline for the rest of the year."
Europe's economy may struggle to gather strength as governments from Italy to Spain step up budget cuts to fight the debt crisis.
Pledges of 365 billion euros (US$525 billion) in official loans to Greece, Portugal and Ireland, and 110.5 billion euros of bond purchases by the European Central Bank have failed to fix the finances of those countries or prevent -speculative attacks on Spain and Italy.
The eurozone gross domestic product expanded 0.2 percent in the second quarter after a 0.8 percent gain in the previous quarter, the worst performance since the region emerged from recession in late 2009. In Germany, Europe's largest economy, growth has almost stalled.
Markit's survey indicated the eurozone services indicator has slipped to 51.5 from 51.6 in July's survey. The manufacturing gauge dropped to 49.7, indicating a contraction.
In Germany, the manufacturing index held steady at 52, while services dipped to 50.4, a 25-month low, Markit said.
France's manufacturing gauge dropped to 49.3, indicating a contraction, from 50.5 a month earlier, while services climbed to 56.1 from 54.2.
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