Euro zone: Private sector warns of 'uneven and fragile' recovery
Signs of weakness keep rate cut speculation on the table at the ECB
Thursday 20 February 2014
The eurozone’s “uneven and fragile” recovery was underlined today as the region’s private-sector companies stuttered in February, a new survey warned.
Financial data provider Markit’s latest snapshot of activity among manufacturing and services firms, where a score over 50 signals growth, remains in expansion territory but surprisingly slowed from 52.9 to 52.7.
Despite strong German growth, the main culprit for the slowdown was renewed malaise in France, where firms reported a fourth successive monthly slide in activity and new orders falling at an even faster rate than the previous month.
“A dip in the eurozone PMI provides a reminder that the region’s recovery continues to be uneven and fragile,” Markit chief economist Chris Williamson said.
Markit’s surveys suggest growth of 0.5 per cent for the eurozone in the current quarter, accelerating from the 0.3 per cent seen at the end of last year and the strongest pace for three years.
But analysts said the signs of weakness kept further rate cuts on the table at the European Central Bank, where President Mario Draghi is battling the threat of deflation as the single currency bloc labours under unemployment close to record levels.
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