This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/business/2013/feb/21/eurozone-hopes-growth-fade-pmi
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Eurozone hopes for return to growth fade in wake of PMI data | Eurozone hopes for return to growth fade in wake of PMI data |
| (about 1 month later) | |
| Hopes of a rapid return to growth in the crisis-hit eurozone faded on Thursday after news of deteriorating business conditions in both the manufacturing and services sectors. | Hopes of a rapid return to growth in the crisis-hit eurozone faded on Thursday after news of deteriorating business conditions in both the manufacturing and services sectors. |
| Despite the easing of financial tensions since the middle of 2012, the latest purchasing managers' index (PMI) for the 17-nation single currency zone fell back in February, reversing the upward trend of the previous two months. France fared particularly badly, prompting a warning from one analyst that the performance of the eurozone's second largest economy is more in line with the bloc's periphery than with Germany. | Despite the easing of financial tensions since the middle of 2012, the latest purchasing managers' index (PMI) for the 17-nation single currency zone fell back in February, reversing the upward trend of the previous two months. France fared particularly badly, prompting a warning from one analyst that the performance of the eurozone's second largest economy is more in line with the bloc's periphery than with Germany. |
| The survey by Markit said a weak service sector was the main reason its PMI fell from 48.6 to 47.3 this month – below the 50 level that marks the cutoff point between contraction and expansion. | The survey by Markit said a weak service sector was the main reason its PMI fell from 48.6 to 47.3 this month – below the 50 level that marks the cutoff point between contraction and expansion. |
| Ben May, European analyst at Capital Economics, said the PMI was consistent with output in the eurozone economy falling by a further 0.3% in the first three months of 2013, following a 0.6% decline in the final quarter of 2012. | Ben May, European analyst at Capital Economics, said the PMI was consistent with output in the eurozone economy falling by a further 0.3% in the first three months of 2013, following a 0.6% decline in the final quarter of 2012. |
| Financial markets, which had been expecting an improvement in the PMI, drove the euro lower following the survey's publication. The single currency lost ground against both the dollar and the yen. | Financial markets, which had been expecting an improvement in the PMI, drove the euro lower following the survey's publication. The single currency lost ground against both the dollar and the yen. |
| Analysts were particularly alarmed by the worsening state of the French economy, where business conditions dropped to their weakest level since the nadir of the global recession in early 2009. France's PMI dropped from 42.7 to 42.3 in February, a level that economists said pointed to a 1% drop in gross domestic product in the first quarter of 2013. Germany's PMI also fell, but even after the drop from 54.4 to 52.7 the latest Markit health check suggested that growth would resume after the 0.5% drop in late 2012. | Analysts were particularly alarmed by the worsening state of the French economy, where business conditions dropped to their weakest level since the nadir of the global recession in early 2009. France's PMI dropped from 42.7 to 42.3 in February, a level that economists said pointed to a 1% drop in gross domestic product in the first quarter of 2013. Germany's PMI also fell, but even after the drop from 54.4 to 52.7 the latest Markit health check suggested that growth would resume after the 0.5% drop in late 2012. |
| Chris Williamson, economist at Markit said: "Digging into the data shows increasing schisms within the eurozone. National divergences between France and Germany have widened so far this year to the worst seen since the survey began in 1998. Germany is on course to grow in the first quarter. In contrast, France's downturn is likely to deepen, bringing the euro area's second-largest member more in line with the periphery than with the now solitary-looking German 'core'." | Chris Williamson, economist at Markit said: "Digging into the data shows increasing schisms within the eurozone. National divergences between France and Germany have widened so far this year to the worst seen since the survey began in 1998. Germany is on course to grow in the first quarter. In contrast, France's downturn is likely to deepen, bringing the euro area's second-largest member more in line with the periphery than with the now solitary-looking German 'core'." |
| The survey illustrated the length and the severity of a downturn that resulted in the eurozone failing to register a single quarter of growth in 2012, with a flat first three months followed by three subsequent declines. Output fell for the 13th successive month while new orders dipped for a 19th month. | The survey illustrated the length and the severity of a downturn that resulted in the eurozone failing to register a single quarter of growth in 2012, with a flat first three months followed by three subsequent declines. Output fell for the 13th successive month while new orders dipped for a 19th month. |
| With the eurozone jobless rate already heading for 12%, employment fell for the 14th successive month in February. Markit said, however, that the rate of job cutting eased compared with January, which had seen the largest drop since December 2009. | With the eurozone jobless rate already heading for 12%, employment fell for the 14th successive month in February. Markit said, however, that the rate of job cutting eased compared with January, which had seen the largest drop since December 2009. |
| "A steepening rate of decline in February is a disappointment, and suggests that the eurozone is on course to contract for a fourth consecutive quarter in the first three months of the year," Williamson said. | "A steepening rate of decline in February is a disappointment, and suggests that the eurozone is on course to contract for a fourth consecutive quarter in the first three months of the year," Williamson said. |
| "However, despite the fall in the PMI, the first quarter decline in the economy should be less severe than the 0.6% drop in GDP seen in the final quarter of 2012, with a contraction of 0.2-0.3% looking likely." | "However, despite the fall in the PMI, the first quarter decline in the economy should be less severe than the 0.6% drop in GDP seen in the final quarter of 2012, with a contraction of 0.2-0.3% looking likely." |
| Peter Vanden Houte, of ING bank, said: "Today's figures are a reality check: the improvement in Europe has until now been a financial markets story, while the real economy remains in the doldrums. More needs to happen to put the eurozone on a sustainable recovery path." | Peter Vanden Houte, of ING bank, said: "Today's figures are a reality check: the improvement in Europe has until now been a financial markets story, while the real economy remains in the doldrums. More needs to happen to put the eurozone on a sustainable recovery path." |
| Top savings accounts | |
| Coventry BS | |
| GE Capital Direct | |
| Skipton BS | |
| Powered by MoneySupermarket for the Guardian |