Tags: euro | services | manufacturing | contract

Euro-Area Manufacturing, Services Contract for 15th Month

Tuesday, 23 April 2013 06:42 AM

Euro-area services and manufacturing output contracted for a 15th month in April as the currency bloc struggled to emerge from a recession.

A composite index based on a survey of purchasing managers in both industries held at 46.5, London-based Markit Economics said today. That’s in line with the median of 26 economists’ forecasts in a Bloomberg News survey. A reading below 50 indicates contraction.

“Although the PMI was unchanged in April, the survey is signaling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to intensify further in coming months rather than ease,” Chris Williamson, chief economist at Markit, said in today’s report.

The euro-area economy has contracted for five quarters, and confidence has been shaken by political turmoil in Italy and the bailout of Cyprus. The International Monetary Fund last week lowered its global growth forecast and urged the European Central Bank to pursue an “aggressive” monetary policy.

ECB President Mario Draghi said last week that the economic situation in the 17-nation euro area hadn’t improved since the ECB’s last meeting on April 4. The ECB predicts the euro-area economy will shrink 0.5 percent this year before growing 1 percent in 2014.

The euro was trading at $1.2988 at 10:14 a.m. in Brussels, down 0.6 percent on the day.

First-Quarter Loss

The euro-area services index rose to 46.6 in April from 46.4 in March, today’s data showed. The manufacturing gauge fell to 46.5 from 46.8.

Commerzbank AG, the German bank that got 18.2 billion euros ($23.7 billion) in state aid, on April 19 forecast a first-quarter loss on staff-reduction costs as executives faced disgruntled shareholders in Frankfurt.

Carrefour SA, France’s biggest retailer, on April 18 reported weaker first-quarter sales as cold weather and slow consumption in Europe weighed on demand in the region. Revenue from continuing operations fell 1.3 percent to 20.8 billion euros, the Boulogne-Billancourt, France-based company said.

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Tuesday, 23 April 2013 06:42 AM
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