Home > news > world > Euro zone PMI shows business activity contracting steeply

Brussels: Private business activity across the euro zone hit a two-month low in February, signalling a steepening of the economic downturn, a leading growth indicator said on Thursday.

The Purchasing Managers’ Index published by London-based Markit fell to 47.3 in February from 48.6 the previous month.

The February indicator contrasted sharply with an easing over the previous three months. The January figure notably showed private business activity at a 10-month high.

“A steepening rate of decline in February is a disappointment, and suggests that the euro zone is on course to contract for a fourth consecutive quarter in the first three months of the year," said Markit’s chief economist Chris Williamson.

January had marked a third monthly rise running for the index even though it remained below the 50-point line indicating economic growth or contraction.

Markit’s Williamson said that despite the fall in PMI, the first-quarter decline in the economy should be less severe than the 0.6% drop in gross domestic product (GDP) seen in the final quarter of 2012.

He forecast a contraction of 0.2 to 0.3%.

He also noted widening differences within the euro zone, with Germany on course to grow in the first quarter and possibly expanding while France, the euro area’s second-biggest economy, headed for a deeper downturn.

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