Eurozone to slip back into recession next year
Published 16/12/2011 | 05:00
THE eurozone will slip back into recession next year, and the risk of the single currency breaking up is still real, according to new research from Ernst & Young (E&Y).
It's bad news for hopes of an export-led recovery in the Irish economy. The warning comes despite the latest Purchasing Managers Index (PMI) showing that the rate of the economic slowdown in the eurozone eased in December.
The Markit Eurozone Composite PMI measures activity in private-sector companies across the services and manufacturing sectors. It is based on a survey of managers at thousands of companies across the 17 euro members.
The index records economic activity on a scale either side of
50 -- growth is recorded by any score over 50 and a decline in output shows up as a number less than 50.
Preliminary results for December show it rose for the second month in a row, to 47.9 from 47.0, but the gauge has now been negative for four consecutive months in a row.
It backs up E&Y's warning of an imminent recession across the eurozone.
It is bad news for Ireland, which despite the slow down in the domestic economy has up to now been able to export into less badly hit markets abroad.
E&Y said Ireland was is on track for one of the strongest economic recoveries across the eurozone.
, but warned that the recovery here wouldwill be largely jobless.
Unemployment will come down from the current high of 14.4pc E&Y said but will still be aas high as 12pc in 2015.
In better news the research said Ireland's economic performance has risen from 16th out of 17 eurozone economies in 2010 to 11th today. The country will to be in the top 10 of euro members in terms of growth next year, it said