| CATEGORY: INTERNATIONAL ECONOMIC |
Tue 24 Jul 2012
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LONDON (SHARECAST) - The Markit Eurozone PMI Composite Output Index signalled the 10th contraction in the private-sector economy in the last 11 months in July.
Though the index remained stable at 46.4 this month, the reading at the end of June marked the steepest quarterly downturn for three years.
Markit notes that the “fall in output was widespread across the single currency area, with both the core and periphery contracting.”
“The flash PMI for July suggests the euro area downturn showed no signs of letting up at the start of the third quarter and is consistent with GDP falling at a quarterly rate of around 0.6%, which is similar to the rate of decline we expect to see for the second quarter,” said Markit chief economist Chris Williamson.
Particularly worrisome, Eurozone employment fell for the seventh straight month, dropping at the fastest rate since January 2010 as a larger number of firms increasingly cut capacity. “Job losses gathered pace in both manufacturing and services, with the former posting by far the steeper rate of decline,” Markit reported.
“Companies across the region are cutting staff numbers at the fastest rate for two-and-a-half years as the outlook darkens. Service providers are now the gloomiest since March 2009, while manufacturers are slashing their inventories of raw materials in the expectation of ongoing weak sales in coming month,” Williamson warned.
JM
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