El PMi de Europa bajo a 46.7 en Abril, se teme que este sea el tercer trimestre se recesion para Europa.
Updated May 4, 2012, 5:54 a.m. ET
Euro-Zone PMI Points To Steeper Contraction
By Ilona Billington
Euro-Zone Composite PMI much weaker than expected
Spain, Italy and France all weighed down by sharp drop in new business
Economic contraction now seen extending, and possibly deepening in 2Q
German services sector expanded, but the outlook is uncertain
Retail sales recorded surprise rise in March
LONDON (Dow Jones)--Private sector economic activity in the euro-zone declined at a faster pace than expected in April, according to surveys of purchasing managers at manufacturers and service providers.
That suggests that an economic contraction that began in the final three months of last year, and likely persisted in the first quarter of this year, has continuedas further budget cuts are implemented in many of the currency area's members.
"It appears that the euro zone is headed for a third successive quarter of Gross Domestic Product contraction in the second quarter of 2012," said Howard Archer, chief euro zone and U.K. economist for IHS Global Insight. "Indeed, there is a growing risk that the rate of euro zone contraction could actually deepen in the second quarter."
Despite the economy's weakness, European Central Bank President Mario Draghi Thursday made it clear that he sees it as the responsibility of governments to revive growth, which he acknowledged would take time.
The composite purchasing managers' index, a measure of private-sector activity based on surveys of 4,500 manufacturing and services firms, slumped to 46.7 in April from 49.1 in March. That was the lowest level since October last year, when an intensification of the debt crisis threatened to lead to a credit crunch, before the European Central Bank decided to pump more than EUR1 trillion in cheap funding into the financial system.
A reading below the break-even 50 mark indicates activity is contracting.
Economists were expecting no change from the preliminary reading April reading of 47.4, according to a Dow Jones Newswires survey. The preliminary figures released on April 23 was based on 85% of usual monthly survey replies.
"The final euro zone PMI came in well below the flash reading as business conditions deteriorated at a faster rate towards the end of the month," said Chris Williamson, Markit's chief economist.
"The survey suggests that the economy was contracting at a quarterly rate of around 0.5% in April, extending the downturn into a third successive quarter," he said.
The purchasing managers' index for the services sector dropped to 46.9 from 49.2 in March - again below the preliminary estimate of 47.9.
The euro zone's services sector lagged its global counterparts. The equivalent US measure--the non-manufacturing ISM--signaled a continued expansion in April with the index at 53.5, although it was lower than March when the index was 56.0.
The HSBC China services PMI, meanwhile pointed to renewed growth, rising to 51.4 in April from March's 49.9.
Within the euro zone, the services PMIs for Spain, Italy and France all suffered steep declines in April from March. A sharp drop in new business was evident across all three countries. Fewer orders led to a drop in business confidence and job cuts, particularly in Spain and Italy, the surveys showed.
Germany's services sector continued to expand, although at 52.2, the final services PMI was weaker than the preliminary reading of 52.6 and barely changed from 52.1 in March.
But even in the euro zone's strongest economy, new business fell for the first time in five months, leading service providers to cut jobs for the first time since January.
"April's survey suggests the prospect of Germany returning to recession in 2012 is resting on an even thinner knife edge," said Tim Moore, senior economist at Markit.
The results of the survey of manufacturing firms released Wednesday showed activity in that sector is at the weakest PMI level since June 2009.
The euro-zone economy contracted by 0.3% in the fourth quarter of last year, and most recent data suggests it shrank again in the first quarter of this year. Many economists regard two quarters of contraction as indicating an economy is in recession.
There was one chink of light in figures also released Friday that showed a surprise rise in retail sales in March, which points to a pickup in the first quarter as a whole.
The European Union's statistics agency Eurostat said the volume of retail sales rose by 0.3% from February, but were down 0.2% from March 2011.
The pickup was largely driven by a 0.8% rise in German retail sales and a 0.9% rise in French sales.
Elsewhere, consumers spent less freely. Sales fell by 0.5% in Spain and by 2.2% in Portugal, both economies in which governments have embarked on tough austerity programs. Eurostat didn't give figures for Greece and Italy, which are also pursuing austerity, while sales in Ireland were unchanged.
But it's unlikely that the March rise heralds a sustained period of higher consumer spending.
Euro-zone consumers have been squeezed by a steady rise in unemployment--which matched a record high in March--slow wage growth, and rising energy prices, added to which is the uncertainty created by the currency area's fiscal crisis. Recent surveys have pointed to a decline in consumer confidence, which usually presages a decline in consumer spending.
-By Ilona Billington, Dow Jones Newswires; +44 20 7842 9452;
ilona.billington@dowjones.com(Nicholas Winning and Paul Hannon in London contributed to this article.)
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