A key indicator of the health of the eurozone’s economies, the composite purchasing manager’s index, has tumbled to its lowest level in three years, at 45.7. It is the ninth consecutive month below 50, the watershed between growth and contraction.
Weakness was spread across all the major eurozone economies, with the rate of decline in Germany quickening. Surveyor Markit said it corresponded to a quarterly 0.5% economic contraction for the entire eurozone.
Beyond the trio of Greece, Portugal and Ireland, soon to be joined in the market’s opinion, by Spain, the Italian economy is faltering, France looks fragile and the signs are Germany may even be heading for contraction in Q4. Annual growth there has been trimmed to just one percent, and the economy may already be in recession as export orders dry up.
As Germany bucked the worst of the financial crisis posting strong growth from 2009-2011 it was able to support the entire eurozone. That crutch now appears to be slipping away.