Output sinks to 20-month low in the Eurozone

GROWTH in economic output across the Eurozone hit a 20-month low in June, data revealed yesterday, while a steep drop in retail sales also shook the 17-country single currency area.

“The region has seen the sharpest slowing in growth since just after the collapse of Lehman’s in late-2008,” a gloomy Markit report said.

Purchasing managers’ index (PMI) surveys sank to 53.3 across member states, from 55.8 in May – the sharpest downturn since November 2008.

The higher the figures are above the no-change 50 line, the faster the growth they indicate.

Spain and Italy dipped back into contraction, measuring 49.2 and 48.4 respectively. There was better news elsewhere in the periphery, with Ireland’s service sector recording a four-month high. Yet even the Irish upturn only amounts to a “modest expansion”, Markit said.

Output growth was typically stronger in the Eurozone’s core economies of Germany and France, yet both still reported eight month lows of 56.3 and 54.9 respectively.

Meanwhile, retail sales fell 1.1 per cent in May compared to April in the Eurozone. Germany reported a drop of 2.8 per cent in high street sales.