“Euro-area services and manufacturing output contracted more than economists estimated in March, adding to signs the currency bloc’s economy is struggling to emerge from a recession.
A composite index based on a survey of purchasing managers in both industries fell to 46.5 from 47.9 in February, London- based Markit Economics said today. Economists had forecast a reading of 48.2, according to the median of 23 estimates in a Bloomberg survey. A reading below 50 indicates contraction.
The data “indicate that the euro-zone economy has remained stuck in recession in the first quarter,” said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. “With fiscal austerity, tight credit and high unemployment set to keep most peripheral economies in recession, the path back to growth will likely be slow and bumpy. Moreover, if the situation surrounding Cyprus spirals out of control the onset of recovery might well be delayed.”
The euro-area economy has contracted for five straight quarters and is forecast to shrink 0.1 percent in the first three months of 2013 before returning to growth, the median of 24 economists’ estimates in a separate Bloomberg survey shows. The European Central Bank forecasts the economy will contract 0.5 percent this year.
