The euro zone is expected to suffer an ongoing downturn with services posting a shaper rate of decline even as factory contraction rate slowed in November, according to flash estimates from Markit Economics on Thursday.
The London-based leading, global financial information services company reported today that euro zone PMI composite output index was little changed in November, up slightly from 45.7 in October and expected to a flash estimate of 45.7.
According to Markit, Octobers reading had been the lowest since June 2009. "For the fourth quarter of 2012 so far, PMI data suggest the strongest contraction of output since the second quarter of 2009," Markit said in a statement.
In 14 of the last 15 months, activity has fallen with the exception being a marginal increase seen in January, as manufacturing and services sectors saw sharp downturns, where business activity fell at a rate "not seen since July 2009".
Euro zone PMI manufacturing index rose to 46.2 this month, from 45.4 in October and above the expected reading of 45.6. While services contraction deepened to a 40-month low as the index dropped to 45.7 from 46.0, also below median estimate of 46.0.
Expectations for services activity in the year ahead dropped to the lowest since March 2009, weighing on services industry as sentiment fell sharply in Germany, where rates of declines in output eased, but remained substantial, notably in France.
In fact, the region is still paralyzed by the financial crisis that weighed on sentiment as EU leaders failed to reach a final agreement needed to secure Greek aid amid tensions between nations over EU budget talks to be held in Brussels until Friday.
With a sharper rate of decline in services sector, euro area slowdown is seen accelerating in the fourth quarter, as the economy contracted 0.1 percent after a 0.2 percent contraction a quarter ago, and unemployment rate stands at a record 11.6 percent.