LONDON: The euro zone's biggest member Germany is being sucked into the bloc's worsening economic quagmire, business surveys suggested on Wednesday, as similar data signalled the slowdown in China may be abating.
The slump that began in Greece and spread to other smaller euro zone economies was clearly gripping the core in October, marking the worst month for the 17-member bloc since it emerged from recession more than three years ago.
Markit's Composite Purchasing Managers' Index (PMI), which polls around 5,000 businesses across the 17-nation bloc and is viewed as a reliable growth indicator, fell to 45.8 this month.
That was the lowest reading since June 2009, confounding consensus expectations in a Reuters poll for a rise to 46.4.
The index has now been below the 50 mark that separates growth from contraction since February.
Similar PMI data for China suggested the world's second biggest economy, a key world exporter, is slowly recovering from its weakest period of growth in three years, with new orders and output at their highest in months.
A comparable PMI for the United States due at 1258 GMT is also expected to rise, showing a modest acceleration in growth.
GERMAN PLUNGE
The manufacturing PMI for Germany - another major exporter and Europe's economic powerhouse - plunged to 45.7 from 47.4, also confounding expectations for a rise and well below even the lowest forecast polled by Reuters.
The rate of decline was even worse in France.
"(It) reinforces concern that the economic downturn in the region may be deepening and widening," said Martin van Vliet, senior economist at ING.
The data were published just before European Central Bank President Mario Draghi was due to appear before German lawmakers for a grilling over whether his plans to buy euro zone sovereign debt might trigger inflation or compromise ECB independence.
They also coincided with the latest numbers from Germany's Ifo institute showing business sentiment in the country dropped sharply to its lowest in more than 2-1/2 years, the sixth consecutive monthly fall.
"Any hopes of a rebound appear to have been dashed for now. Germany is heavily dependent on exports so a global slowdown is going to impact on Europe's growth motor," said Peter Dixon at Commerzbank.
Germany has been mostly resilient to the three-year old sovereign debt crisis. But economic data in recent months have shown the rot is spreading.
indiatimes.com
The slump that began in Greece and spread to other smaller euro zone economies was clearly gripping the core in October, marking the worst month for the 17-member bloc since it emerged from recession more than three years ago.
Markit's Composite Purchasing Managers' Index (PMI), which polls around 5,000 businesses across the 17-nation bloc and is viewed as a reliable growth indicator, fell to 45.8 this month.
That was the lowest reading since June 2009, confounding consensus expectations in a Reuters poll for a rise to 46.4.
The index has now been below the 50 mark that separates growth from contraction since February.
Similar PMI data for China suggested the world's second biggest economy, a key world exporter, is slowly recovering from its weakest period of growth in three years, with new orders and output at their highest in months.
A comparable PMI for the United States due at 1258 GMT is also expected to rise, showing a modest acceleration in growth.
GERMAN PLUNGE
The manufacturing PMI for Germany - another major exporter and Europe's economic powerhouse - plunged to 45.7 from 47.4, also confounding expectations for a rise and well below even the lowest forecast polled by Reuters.
The rate of decline was even worse in France.
"(It) reinforces concern that the economic downturn in the region may be deepening and widening," said Martin van Vliet, senior economist at ING.
The data were published just before European Central Bank President Mario Draghi was due to appear before German lawmakers for a grilling over whether his plans to buy euro zone sovereign debt might trigger inflation or compromise ECB independence.
They also coincided with the latest numbers from Germany's Ifo institute showing business sentiment in the country dropped sharply to its lowest in more than 2-1/2 years, the sixth consecutive monthly fall.
"Any hopes of a rebound appear to have been dashed for now. Germany is heavily dependent on exports so a global slowdown is going to impact on Europe's growth motor," said Peter Dixon at Commerzbank.
Germany has been mostly resilient to the three-year old sovereign debt crisis. But economic data in recent months have shown the rot is spreading.
indiatimes.com
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