Services data points to euro area recession

Ben Southwood
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THE SERVICE sectors of economies throughout the Eurozone continued to contract in June, according to data released yesterday, although separate figures showed wide differences in levels of unemployment.

The Eurozone’s fall in total economic output eased slightly in June, according to Markit’s latest composite purchasing managers’ index (PMI).

Specifically, the data revealed poor service statistics in the big four Eurozone economies – Spain registered 43.4, Italy posted 43.1, France jumped to 47.9, and Germany slumped to 49.9.

All figures below 50 indicate economic contraction. PMI correlates closely with GDP, and since services make up a large portion of these economies, the negative figures are ominous bellwethers for economic activity.

Yet the bad news contrasted with mildly positive retail results released by Eurostat yesterday, which showed volume of trade in the EU was up 0.6 per cent in May compared to April.

And separately, the statistics body showed how unemployment levels varied widely between Eurozone leaders and laggards in 2011.

The statistics showed an astonishing 62.8 per cent rate of long-term unemployment among the jobseekers in Campania, Italy. This compares with four per cent of those out of work being long-term unemployed in Aland, Finland.

There were also deep cleavages between north and south in youth unemployment. In the German region of Tübingen just 4.3 per cent of young people were seeking work, while Ceuta in Spain had youth unemployment of 65.8 per cent.