Activity drops as euro area’s slump deepens

Tim Wallace
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JOBS and output are falling across the Eurozone, survey data showed yesterday, with even the relatively healthy German economy shedding workers.

Consumer confidence plummeted to a record low in Italy, France’s business climate deteriorated further and Spain’s central bank announced a further 0.4 per cent fall in GDP in the first quarter, painting a very gloomy picture of the currency area’s prospects.

The decline in services and manufacturing output accelerated in April, with Markit’s purchasing managers’ indices (PMIs) falling to a five-month low of 47.9 in services and a 34-month low of 46.4 in manufacturing.

In France the services index fell sharply below the “no change” level of 50, from 50.1 in March to 46.4 in April, while manufacturing continued its fall at 47.3, slightly slower than the 46.7 seen a month ago.

Output growth in Germany slowed to a five-month low at 50.9, from 51.6, and employment fell for the first time in over two years.

Both the manufacturing and services sectors saw job losses, as the manufacturing PMI fell from 48.4 in March to a 33-month low of 46.3, while services accelerated from 52.1 to 52.6.

Italian data agency Istat reported a drop in consumer confidence to 89, the lowest since records began in 1996 and following months of tough austerity and economic reforms from technocratic leader Mario Monti.

Meanwhile French agency Insee’s business climate index fell one point to 95 in April.