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Eurozone output still falling, PMI survey indicates | Eurozone output still falling, PMI survey indicates |
(about 3 hours later) | |
Activity in the eurozone's services and manufacturing sectors continued to fall in April, a survey has indicated, with even German output declining. | Activity in the eurozone's services and manufacturing sectors continued to fall in April, a survey has indicated, with even German output declining. |
Markit's composite purchasing managers' index (PMI) for the eurozone remained at 46.5 in April, unchanged from the month before. | Markit's composite purchasing managers' index (PMI) for the eurozone remained at 46.5 in April, unchanged from the month before. |
A reading below 50 indicates shrinking activity. | A reading below 50 indicates shrinking activity. |
The survey suggested that German private sector output fell for the first time since November last year. | The survey suggested that German private sector output fell for the first time since November last year. |
Chris Williamson, chief economist at Markit, said: "Previously, we've seen Germany expand while other countries have contracted - notably Spain, Italy and France. | Chris Williamson, chief economist at Markit, said: "Previously, we've seen Germany expand while other countries have contracted - notably Spain, Italy and France. |
"Now it seems those contractions are being accompanied by a downturn in the largest economy, Germany, and that will no doubt act as a drag on growth." | "Now it seems those contractions are being accompanied by a downturn in the largest economy, Germany, and that will no doubt act as a drag on growth." |
There was slightly better news from France, where the PMI survey indicated that the private sector contracted at a slower rate in April than before. | There was slightly better news from France, where the PMI survey indicated that the private sector contracted at a slower rate in April than before. |
Policy change? | Policy change? |
The European Central Bank (ECB) is meeting next week for its regular monthly monetary policy meeting, with eurozone interest rates currently at 0.75%. | The European Central Bank (ECB) is meeting next week for its regular monthly monetary policy meeting, with eurozone interest rates currently at 0.75%. |
Mr Williamson warned that while the eurozone PMI figure had not worsened in April, there were signs that things could get worse in the future. | Mr Williamson warned that while the eurozone PMI figure had not worsened in April, there were signs that things could get worse in the future. |
"The forward-looking indicators suggest there's risks to the downside for the contraction to gather pace," he said. | "The forward-looking indicators suggest there's risks to the downside for the contraction to gather pace," he said. |
The eurozone's economy is contracting, and shrank by 0.6% in the last quarter of 2012. | The eurozone's economy is contracting, and shrank by 0.6% in the last quarter of 2012. |
Ben May, European economist at Capital Economics, said the survey could act as a nudge to the ECB to provide some further stimulus measures. | Ben May, European economist at Capital Economics, said the survey could act as a nudge to the ECB to provide some further stimulus measures. |
"[There are] further signs that the improvement in market sentiment alone will not be enough to drag the eurozone out of recession," he said. | "[There are] further signs that the improvement in market sentiment alone will not be enough to drag the eurozone out of recession," he said. |
"Given this, and the fact that inflation looks set to remain subdued, pressure on the ECB to provide additional policy support looks set to increase." | "Given this, and the fact that inflation looks set to remain subdued, pressure on the ECB to provide additional policy support looks set to increase." |
Earlier on Tuesday, a survey by HSBC indicated that growth in China's manufacturing sector slowed in April. | |
The preliminary reading from HSBC's PMI survey fell to 50.5, from 51.6 in March, with a drop in new export orders blamed for the decline. | |
The findings add to concerns about the country's economic recovery. China's growth rate slowed to an annual pace of 7.7% in the first three months of the year, down from 7.9% in the previous quarter. |
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