Eurozone output is lowest in three years
THERE was more bad news for eurozone policymakers yesterday as new data showed factory output declining yet again in April.
Figures for Italy were especially weak but yesterday's data shows, beyond doubt, that the downturn has moved from the so called peripheral states like Ireland and Greece to the core economies of France and Germany.
Research firm Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) dropped to 45.9 last month from 47.7 in March, lower than a preliminary reading and the lowest reading since June 2009.
The index measures growth on a chart either side of 50 -- where a number above 50 shows growth and a value below 50 indicates decline.
The euro area manufacturing PMI has now been under the 50 mark for nine months.
The European data is in contrast to earlier figures that showed the US and China continuing to grow.
"The numbers coming out of the eurozone give no cause for comfort.
"The Chinese economy is holding up, but the debt crisis in Europe is weighing on growth and it's rippling across the world," said Peter Dixon at Commerzbank.
Data from Germany showed its manufacturing sector contracted for the second month running in April and it was a similar picture in neighbouring France.
With the big two in decline, only a handful of countries in the 17-nation euro area are still growing.
It comes as the political balance in Europe is also shifting. General elections in France and Greece this weekend are likely to return candidates who have argued for spending instead of austerity in their campaigns.
Spain is now the cockpit of the euro crisis. Manufacturing there shrank at the fastest pace in nearly three years, according to the latest data. In Italy new orders declined at the fastest rate since March 2009. This is feeding a jobs crisis across the continent -- with Italy and Spain seeing the fastest rise in unemployment.