Euro-area services and manufacturing output contracted more than estimated in September, adding to signs of a deepening slowdown as governments struggle to contain the region’s debt crisis.
A composite index based on a survey of purchasing managers in both industries fell to 49.1 in September from 50.7 in the previous month, London-based Markit Economics said today. That is less than an initial estimate of 49.2 published on Sept. 22. The index fell below 50, indicating contraction, for the first time in more than two years.
European governments are seeking ways to contain the region’s worsening debt crisis, which threatens to push the 17- nation economy back into a recession. Moody’s Investors Service yesterday cut Italy’s credit rating for the first time in almost two decades and European economic confidence slumped more than economists forecast in September.
Today’s figure “is even more gloomy than the earlier flash reading, providing confirmation that the euro-zone recovery has ground to a halt,” Chris Williamson, chief economist at Markit, said in the statement. “Even more disappointing is the steep drop in new business, which suggests that GDP will contract in the fourth quarter unless business and consumer confidence rallies in coming weeks.”
The euro was lower against the dollar, trading at $1.3308 at 10:18 a.m. in Brussels, down 0.3 percent on the day after being down as much as 0.7 percent earlier.
The euro-area services indicator fell to 48.8 last month from 51.5 in August, Markit said. The manufacturing gauge decreased to 48.5 in September from 49.
Source bloomberg.com
