The latest Eurozone PMI figures shows that the Eurozone has slipped deeper into recession with the currency bloc’s private sector shrinking for an 11th straight month.
The Purchasing Managers Index compiled by Markit shows that whilst the index rose slightly from November the region posted its worst figures since the Eurozone was emerging from it last recession three years ago. Markit polled around 5,000 businesses across the Eurozone.
“The official GDP data are lagging behind the PMIs so we strongly suspect that the official data will show an increasing downturn of the Eurozone recession in the final quarter,” said Chris Williamson, chief economist at data collator Markit.”The data is consistent with GDP falling about 0.5 percent.”
The PMI has been below the 50 mark that divides growth from contraction for all but one of the last 16 months showing that growth in the region has stalled with very little sign of an improvement in the near future.
The three-year long Eurozone debt crisis has inflicted chaos across the region, the economies of most of the currency bloc have suffered, the global economy has damaged and the region itself has come close to being torn apart.
Germany as usual appears to be showing signs of resilience. The service sector in Europe’s largest economy appears to be bouncing back to growth for the first time in eight months. In France, however the picture is far gloomier. The nation’s PMI remains firmly below the 50 mark.
“France is faring much worse than Germany. It is becoming more aligned with its southern neighbours of Spain and Italy.” Williamson said.
Manufacturers, who led the bloc out of the last recession, saw only a slight improvement. The factory PMI crept up to 46.3 from 46.2, missing forecasts for a steeper rise to 46.6.The output index for the sector held steady at November’s 46.1.
“There are some rays of hope here. It is moving in the right direction so there are signs that the business cycle has reached a low point globally and picking up,” Williamson said.
The Pound to Euro exchange rate is currently trading at 1.2335
The Pound to US Dollar exchange rate is currently trading at 1.6133
The Pound to Australian Dollar exchange rate is currently trading at 1.5316
The Euro to US Dollar exchange rate is currently trading at 1.3077
The Euro to Pound exchange rate is currently trading at 0.8102
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