Investing.com – Service sector activity in the euro zone contracted for the fourth consecutive month in December, albeit at a slower pace than initially estimated, official data showed on Wednesday.
In a report, market research group Markit said that its final reading of the euro zone’s services purchasing managers’ index rose to 48.8 in December, up from a preliminary estimate of 48.3.
The euro zone’s service sector PMI in November stood at 47.5.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The average PMI reading in the fourth quarter of 2011 was the weakest since the second quarter of 2009.
The downturn was mainly centered on the region’s periphery, with service sector output falling sharply in Italy and Spain.
In contrast, Germany saw growth reach a five-month high, while business activity in France rose slightly following a decline in the previous month.
The ongoing service sector downturn, weaker global economic growth and ongoing financial market uncertainty meant that business expectations for the coming 12 months remained subdued.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “Economic weakness is most evident in Italy and Spain, where domestic demand has been particularly hard hit by deficit-fighting austerity measures and growing uncertainty about the outlook.”
He added that, “Recession is already looking inevitable in Italy, and is a growing possibility in Spain as well.”
Following the release of the data, the euro was fractionally lower against the U.S. dollar, with EUR/USD easing down 0.11% to trade at 1.3036.
Meanwhile, European stock markets were broadly lower. The EURO STOXX 50 declined 1%, France’s CAC 40 fell 0.6%, Germany's DAX shed 0.55%, while London’s FTSE 100 dipped 0.05%.
In a report, market research group Markit said that its final reading of the euro zone’s services purchasing managers’ index rose to 48.8 in December, up from a preliminary estimate of 48.3.
The euro zone’s service sector PMI in November stood at 47.5.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The average PMI reading in the fourth quarter of 2011 was the weakest since the second quarter of 2009.
The downturn was mainly centered on the region’s periphery, with service sector output falling sharply in Italy and Spain.
In contrast, Germany saw growth reach a five-month high, while business activity in France rose slightly following a decline in the previous month.
The ongoing service sector downturn, weaker global economic growth and ongoing financial market uncertainty meant that business expectations for the coming 12 months remained subdued.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “Economic weakness is most evident in Italy and Spain, where domestic demand has been particularly hard hit by deficit-fighting austerity measures and growing uncertainty about the outlook.”
He added that, “Recession is already looking inevitable in Italy, and is a growing possibility in Spain as well.”
Following the release of the data, the euro was fractionally lower against the U.S. dollar, with EUR/USD easing down 0.11% to trade at 1.3036.
Meanwhile, European stock markets were broadly lower. The EURO STOXX 50 declined 1%, France’s CAC 40 fell 0.6%, Germany's DAX shed 0.55%, while London’s FTSE 100 dipped 0.05%.