Mike Shedlock

Markit Eurozone Services and Composite PMIs show renewed contraction due to drop in services activity, making it extremely difficult to deny that Europe is in a recession. Let's take a look at some numbers.

Markit Eurozone Composite PMI®

The Markit Eurozone PMI® Composite Output Index fell from 50.4 in January to 49.3 in February, dropping below the earlier flash estimate of 49.7. The final reading confirmed that business activity contracted in February, having briefly returned to growth in January following four months of decline at the end of last year.

Key points:

  • Final data confirm slide back into contraction, as drop in services activity offsets marginal rise in manufacturing output
  • Strong downturns still evident in Italy and Spain
  • Employment and prices charged fall as firms seek to cut costs and win new sales

Markit Eurozone Services PMI®

Service sector weakness poses new recession risk

Key points:

  • Service sector activity contracts for fifth time in six months
  • Ongoing fall in new business leads to job losses
  • Growth in Germany contrasts with steeper declines in Italy and Spain
  • Business confidence hits seven-month high

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.

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