The speedy decline of the Eurozone’s private sector accelerated in March according to the regions latest services PMI data, setting the single currency bloc on course for its sixth-straight quarter of economic contraction.
According to Markit economics, the regions Purchasing Managers Index for the services sector declined to 46.4 in March from the previous month’s level of 47.9 and below economist expectations of 46.5. The regions composite index which is used to measure both services and manufacturing sectors fell to 46.5 in March from 47.9 in February. A reading below 50 indicates contraction.
Thursday’s data is consistent with economist expectations that the Eurozone will have slid deeper into recession during the first quarter of 2013 and reinforces figures that show that Eurozone Gross domestic product has fallen for five quarters in a row.
France has once again become a major cause for concern after the nations PMI was the weakest of the major Euro-zone economies, as private sector activity fell to a 48-month low. The PMI came in at 41.3 and further underlined the country’s economic divergence from Germany. The Eurozone’s biggest economy also suffered a decline with Germany edging ever closer to contraction as it posted a PMI of 50.6, a three-month low.
The only nation to post an expansion was Ireland but it too seems to be succumbing to the currency area’s generalized malaise, with its composite PMI falling to 50.8, an eight-month low. Italy meanwhile saw some improvement with a rise from 43.6 to 45.5.
The disappointing data will have further negative impacts on the Eurozone’s already record high levels of unemployment as it shows that new orders are falling at a rapid rate, payrolls are being cut and demand for goods continues to fall.
All eyes are now focused on the European Central Bank to see whether it will come up with a new strategy to kick-start some growth in a rapidly shrinking economy. Today the Bank is due to announce its latest decision on interest rates but any changes to the already record low level of 0.75% are unlikely.
As of 12:10am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8492
The Euro to US Dollar exchange rate is currently trading in the region of 1.2809
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2302
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5301