Euro-area services and manufacturing output contracted less than initially estimated in December, led by Germany, the region’s largest economy, where output reached a four-month high.
A euro-area composite index (ECPMICOU) based on a survey of purchasing managers in both industries rose to 48.3 from 47 in November, London-based Markit Economics said in an e-mailed report today. That’s above an initial estimate of 47.9 on Dec. 15. A reading below 50 indicates contraction. The German composite output gauge rose to 51.3 from 49.4.
Europe’s economy is edging toward a recession as governments toughen budget cuts to contain the region’s debt crisis just as global demand for exports falters. The International Monetary Fund may cut its 2012 global growth forecast this month after lowering it to 4 percent in September, when it predicted “severe” repercussions if Europe fails to contain its crisis.
“The uplift in the euro-zone PMI in December does little to dispel fears of the region sliding back into recession,” Chris Williamson, chief economist at Markit, said in today’s report.
“Despite the upturn, the fourth quarter saw the steepest contraction since the spring of 2009, and forward-looking indicators suggest that a further decline is on the cards for the first quarter of 2012,” he said. “In particular, orders for goods and services continued to collapse, suggesting that output and employment will be cut as we move into the new year.”
A gauge of euro-region manufacturing (PMITMEZ) rose to 46.9 in December from 46.4 in the previous month. A measure of services climbed to 48.8, a three-month high, Markit said.
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