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Eurozone private sector downturn eases

Eurozone private sector downturn eases
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The downturn in the eurozone’s private sector economy has eased slightly.

The latest surveys of companies’ purchasing managers showed an improvement in December, but much of that came in Germany and the region as a whole still looks on course for a moderate recession.

The services sector survey particularly suggested a dire struggle for the eurozone’s peripheral countries, with Germany and France doing better.

Survey compiler Markit warned of a worsening divergence between the euro zone’s stronger economies, and the likes of Italy and Spain that seem to be undergoing a severe economic contraction.

“The uplift in the eurozone PMI in December does little to dispel fears of the region sliding back into recession,” said Chris Williamson, chief economist at Markit.

“Despite the upturn, the fourth quarter saw the steepest contraction since the spring of 2009, and forward-looking indicators suggest that a further decline is on the cards for the first quarter of 2012.”

Italy and Spain were probably already in recession as domestic austerity measures further weighed on the economy, he said.

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