Euro zone faces down­turn since 2009

The Pak Banker - - Front Page -

LON­DON

The euro zone econ­omy is on course for its weak­est quar­ter since the dark days of early 2009, ac­cord­ing to busi­ness sur­veys that showed com­pa­nies toil­ing against shrink­ing or­der books in Novem­ber.

Ser­vice sec­tor firms like banks and ho­tels that com­prise the bulk of the econ­omy fared par­tic­u­larly badly this month, and laid off staff at a faster pace.

While the monthly rate of de­cline that man­u­fac­tur­ers re­ported eased far more than econ­o­mists an­tic­i­pated, Markit's lat­est Pur­chas­ing Man­agers' In­dexes (PMIs) pointed to lit­tle change over­all for a re­ces­sion­hit euro zone this month.

The flash ser­vice sec­tor PMI fell to 45.7 this month, its low­est read­ing since July 2009, the sur­vey showed on Thurs­day, fail­ing to meet the ex­pec­ta­tions of econ­o­mists who thought it would hold at Oc­to­ber's 46.0. It has been rooted be­low the 50 mark that di­vides growth and con­trac­tion for 10 months now, and sur­vey com­piler Markit said it was too soon to say if this marked the nadir. With more aus­ter­ity on the way, and a re­minder of the fes­ter­ing sov­er­eign debt cri­sis in this week's fail­ure of lenders to agree more aid for Greece, prospects for next year look omi­nous.

"The con­cern about the out­look is get­ting worse as we move to­wards the end of the year," said Chris Wil­liamson, chief econ­o­mist from Markit.

He added that Ger­man com­pa­nies es­pe­cially have be­come more pes­simistic about the year ahead. "If the domestic econ­omy of Ger­many, the largest euro zone na­tion, is weak­en­ing, then that bodes ill for the rest of the re­gion, es­pe­cially as there's lit­tle trade pick­ing up out­side the re­gion." — AP

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