“Euro-area services and manufacturing contracted at a faster pace than economists forecast in February as the economy struggled to recover from the deepest recession in almost four years.
A composite index based on a survey of purchasing managers in both industries in the 17-nation currency bloc decreased to 47.3 from 48.6 in January, London-based Markit Economics said today. Economists had forecast a reading of 49, according to the median of 22 estimates in a Bloomberg survey.Germany’s services measure declined more than forecast to 54.1, while its factory gauge rose above 50, indicating expansion in that industry.
The data reinforce indications that the euro-area economycontinued to contract in early 2013 after the recession worsened in the fourth quarter. The European Central Bank forecasts gross domestic product will decline 0.3 percent this year.
“When you’re in the midst of the recession, and some would argue, a depression in some places like Greece, it’s hard to be optimistic,” Robert Savage, chief strategist at New York-based currency fund FX Concepts, said today in a Bloomberg Television interview. The PMI data “are highlighting the problem.”
The euro-area services index fell to 47.3 in February from 48.6 in January, its steepest drop in 10 months, today’s data showed. The manufacturing gauge slipped to 47.8 from 47.9. Markit will publish the final reading for the factory index on March 1 and the services and composite measures on March 3.
German Manufacturing
In Germany, Europe’s biggest economy, the services measure fell to 54.1 in February from 55.7 last month, the sharpest decline since August. The German manufacturing gauge rose to 50.1, moving into expansion for the first time in a year. France’s services gauge fell to 42.7 this month from 43.6 in January, while its manufacturing index increased to 43.6 from 42.9, today’s data showed….”
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