ADVERTISEMENT
News » Money
Nov 20, 4:54 AM EST

Closely watched survey raises fears of the eurozone falling back into recession


AP Photo
AP Photo/Michael Probst
Business Video

Latest Business News
US safety agency tells Chrysler to speed up Jeep recall; gas tanks can rupture in crash

Senators pound executives, but get no clear answer on safety of automotive air bags

Figures on government spending and debt

How the Dow Jones industrial average and other major indexes fared on Thursday

General Motors shakes up management, names new chief of quality

Latest News
GM boss Barra stresses commitment to Opel, announces investment in engine, transmission plants

Chemicals firm Ineos to invest $1 billion in shale gas exploration in Britain

Closely watched survey raises fears of the eurozone falling back into recession

Bank of England policymakers remain divided on interest rate increase

Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
Closely watched survey raises fears of the eurozone falling back into recession

Democrats say '14 election shows need for 'blunt' message on economy in 2016

Bank of England policymakers remain divided on interest rate increase

Survey shows German investor confidence rising as growth figures suggest economy stabilizing

Recession, debt, deflation: A look at the mounting threats facing the global economy

Japan slides into recession in wake of tax hike, undermining global growth prospects

Kurds demand long-term solutions to oil dispute after agreement reached with Baghdad

Israel economy shrinks by 0.4 percent in Q3, first contraction in almost 5 years

US retail sales rise at modest pace in October as greater hiring, cheaper gas boost spending

Japan's GDP data, due Monday, make-or-break for Abe decision on tax hike, snap election

Buy AP Photo Reprints
Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt

LONDON (AP) -- Like Japan, the 18-country eurozone faces the real prospect of sliding back into recession, a closely watched survey indicated Thursday, in an another downbeat development that's is likely to ratchet up the pressure on the European Central Bank to enact further stimulus.

Financial information company Markit said its purchasing managers' index for the eurozone, a broad gauge of business activity, fell to a 16-month low of 51.4 points in November from 52.1 in October. Though anything above 50 indicates expansion, the survey suggests a recession isn't far away.

Markit's chief economist Chris Williamson said the decline "raises the risk of the region slipping back into a renewed downturn" and that quarterly growth in the last three months of the year is set to be just 0.1-0.2 percent. Figures last week showed the eurozone grew only 0.2 percent in the third quarter.

Once again, the survey showed France, Europe's second-largest economy, is a source of concern. Though last week's GDP data showed France growing a greater than anticipated 0.3 percent in the third quarter, that was largely due to government spending holding up, not the manufacturing and services sectors that Markit assesses in its survey.

Markit also found that growth in Germany, Europe's number one economy, has slowed to its weakest pace since the summer of last year, with demand stagnating. And though the rest of the region as a whole continues to outperform the two `core' countries, Markit noted that even here the rate of expansion has cooled.

Analysts said the paltry pace of the eurozone recovery from recession over the past year and a half is likely to cement market expectations that the European Central Bank will do more to boost economic activity.

Earlier this week, ECB President Mario Draghi said outright purchases of government bonds remain an option for the bank. So-called quantitative easing, or QE, could help keep a lid on borrowing costs for businesses, households and governments as well as help reduce the value of the euro to the benefit of exporters.

"The survey confirms the continued weakness of the eurozone economy, which has spread from the periphery to the core, and clearly supports the case for further policy stimulus," said Jennifer McKeown, senior European economist at Capital Economics.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.

 
ADVERTISEMENT