Euro-area services output shrank less than initially estimated in February, adding to signs the currency bloc’s economy may be beginning to emerge from a recession.
An index based on a survey of purchasing managers in the euro-area services industry fell to 47.9 from 48.6 in January, London-based Markit Economics said in a report today. That’s above an initial estimate of 47.3 published on Feb. 21. A reading below 50 indicates contraction. Euro-area retail sales rose the most in three years in January, separate data showed.
The currency bloc’s recession deepened in the fourth quarter, as the economy recorded its worst performance in almost four years with a contraction of 0.6 percent. Gross domestic product will decline again in the first three months of this year before returning to growth in the second quarter, according to the median of 21 economists’ estimates in a Bloomberg survey.
“The region still looks set to see a much smaller drop in GDP in the first quarter compared to the 0.6 percent decline seen in the final quarter of last year,” Chris Williamson, chief economist at Markit, said in the report. The outlook “seems to largely depend on whether Germany can continue to expand and offset the weakness in France, Italy and Spain, which seems a tall order.”
German consumers helped push euro-area retail sales higher in January, the European Union’s statistics office said today. Retail sales in Germany rose 3.1 percent in the latest month and sales for the 17-nation currency bloc increased 1.2 percent, the biggest jump since December 2009.
A composite gauge of euro-area services and manufacturing output fell to 47.9 from 48.6 in January, Markit said in its report. Markit’s index of euro-zone manufacturing output, released on March 1, held at 47.9.
The jobless rate in the euro area rose to a record in January, climbing to 11.9 percent, data showed on March 1. Still, economic confidence in the euro area increased more than economists forecast in February, the European Union said on Feb. 27.
Last week’s unemployment data “suggest that the euro zone is going to remain a very weak spot on the global stage,” Julian Callow, chief international economist at Barclays Plc, said on March 1 on Bloomberg Television’s “The Pulse” with Francine Lacqua. “Nobody is sure what is going to come next.”
Rabobank Groep, the biggest mortgage lender in the Netherlands, said on Feb. 28 that it would struggle to match 2012 results this year as it expects limited economic growth while cost pressure continues.
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