Investing.com - The euro zone's services sector contracted at faster rate than initially expected in February, shrinking for the fifth time in six months, data showed on Monday.
In a report, the market research group, Markit said the final euro zone services business activity index fell to 48.8 in February, down from a preliminary estimate of 49.4.
Analysts had expected the index to remain unchanged from a preliminary estimate of 49.4.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
Of the four largest euro countries, only Germany showed expansion in February, and the rate of growth slowed from January’s seven-month high.
The French service sector stagnated, ending a two-month period of mild expansion. Both Spain and Italy registered steep contractions, with the rates of decline gathering momentum in both cases.
Commenting on the report, Chris Williamson, chief economist at Markit said, “The renewed contraction of the service sector in February is a major disappointment, and the weakness of the sector risks driving the euro zone back into another recession.”
Following the release of the data, the euro added to losses against the U.S. dollar, with EUR/USD shedding 0.2% to trade at 1.3173.
Meanwhile, European stock markets extended losses. The EURO STOXX 50 retreated 1.3%, France's CAC 40 dropped 1.05%, London’s FTSE 100 fell 0.7%, while Germany's DAX tumbled 1.5%.
In a report, the market research group, Markit said the final euro zone services business activity index fell to 48.8 in February, down from a preliminary estimate of 49.4.
Analysts had expected the index to remain unchanged from a preliminary estimate of 49.4.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
Of the four largest euro countries, only Germany showed expansion in February, and the rate of growth slowed from January’s seven-month high.
The French service sector stagnated, ending a two-month period of mild expansion. Both Spain and Italy registered steep contractions, with the rates of decline gathering momentum in both cases.
Commenting on the report, Chris Williamson, chief economist at Markit said, “The renewed contraction of the service sector in February is a major disappointment, and the weakness of the sector risks driving the euro zone back into another recession.”
Following the release of the data, the euro added to losses against the U.S. dollar, with EUR/USD shedding 0.2% to trade at 1.3173.
Meanwhile, European stock markets extended losses. The EURO STOXX 50 retreated 1.3%, France's CAC 40 dropped 1.05%, London’s FTSE 100 fell 0.7%, while Germany's DAX tumbled 1.5%.