Four largest economies in Europe in a slump

May 6, 2013 at 11:56 AM
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LONDON, May 6 (UPI) -- Business output contracted in the four largest economies in Europe in April, research firm Markit Economics said Monday.

The output index fell below 50 in Germany in the month, which meant the country joined France, Spain and Italy with a contraction in output for the month.

Germany fell into negative output growth for the first time since November 2012, Markit said.

For Germany, the output index fell to 49.2, a five-month low. For France, the index hit 44.3, a four-month high. Spain's business output index dropped to 44, a four-month low. Italy's output index climbed to 46.6, a 19-month high, Markit said.

The composite index for the eurozone, measuring service and manufacturing sectors, came to 46.9, Markit said.

The currency region's service index climbed from 46.4 in March to 47 in April.

Overall, however, Markit Economist Chris Williamson said the region's PMI or Purchasing Manager's Index, indicates the "eurozone's economic downturn is likely to have gathered momentum again in the second quarter."

"The European Central Bank has responded to the crisis by cutting interest rates to their lowest ever, but it seems difficult to believe that a mere 25 basis point cut from an already low level will have a material impact on an economy that is contracting so sharply," he said.

The index suggests the gross domestic product for the eurozone declined at a quarterly rate of 0.4 percent to 0.5 percent in April, he said.

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