The closely-watched Purchasing Managers Index (PMI) is showing a decline in business activity for the eurozone in February. The latest reading indicates a recovery is still far off, with the recession even set to deepen.
The Purchasing Managers' Index (PMI) for the 17-nation currency area fell to 47.3 points in February from 48.6 points in January, indicating the economic downturn in the eurozone deepened during the month, the London-based Markit research group said on Thursday.
In February, the key economic indicator, which gauges the opinions of purchasing managers in the manufacturing and services sectors, contrasted sharply with higher readings in the previous three months, notably with a January figure that showed business activity at a 10-month high.
"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," said Markit Chief Economist Chris Williamson.
However, Williamson said he believed that the first-quarter decline would be less severe than the drop of 0.6 percent in eurozone gross domestic product recorded in the final quarter of 2012.
Williamson predicted the eurozone economy would shrink by 0.2 to 0.3 percent as the PMI indicator was well below the 50-point threshold separating growth from contraction. At the same time, he pointed to major differences in the PMI readings of individual eurozone countries.
While Germany was recovering and well on course for expansion, the eurozone's second-largest economy, France, would likely see a deepening of its slump, Williamson said.
uhe/pfd (AFP, dpa)