Service sector in Europe looks grim

March 5, 2012 at 11:18 AM
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BRUSSELS, March 5 (UPI) -- A broad measure of service industries in Europe showed business dropping for the fifth of the past six months in February, research firm Markit reported.

After a one-month period of slight growth, which came in January, the Markit Eurozone Services Business Activity Index dropped back less than 50 percent, which is the dividing line between growth and contraction.

The index for service industries in the 17-member eurozone for February fell from 50.4 percent to 48.8 percent.

Indexes for Ireland hit a 12-month high at 53.3 percent. In Germany, the index hit a two-month low at 52.8 percent.

The index in France sat on the fence at an even 50 percent. In Italy, which has the third largest economy in the euozone behind Germany and France, the service activity index showed contraction at 44.1 percent. In Spain, the index came in at 41.9 percent.

"Service sector weakness poses new recession risk," Markit said.

New orders have fallen across the region for six consecutive months and the contraction in new orders triggered a further decline in backlogs of work.

For the second consecutive month, the employment index for the service sector showed contraction although "the rate of job shedding was marginal," the report said.

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