Euro-region services and manufacturing output contracted more than initially estimated in April, adding to signs of a deepening economic slump.
A euro-area composite index based on a survey of purchasing managers in both industries dropped to 46.7 from 49.1 in March, London-based Markit Economics said today. That’s the fastest rate of decline since October and below an estimate of 47.4 published on April 23. A reading below 50 indicates contraction.
After shrinking in the final three months of 2011, Europe’s economy probably slipped into recession in the first quarter as the region’s worsening debt crisis forced governments from Spain to Italy to step up spending cuts. European Central Bank President Mario Draghi yesterday said the economic outlook has become “more uncertain” and left open the option of further stimulus after keeping the benchmark interest rate at 1 percent, already a record low.
“It appears that the euro-zone economy is headed for a third successive quarter of gross domestic product contraction,” said Howard Archer, chief European economist at IHS Global Insight in London. “Indeed, there is a growing risk that the rate of euro-zone contraction could actually deepen in the second quarter.”