Euro Area Economic Outlook Weakens, French Service Sector Shrinks

Arthi Gupta
04 May, 2012
New York City

Euro area retail sales rebounded in March but service sector activity disappointed in April with a contraction in France and Spain. Spanish jobless rate declined in April.

[R]12:30 PM Frankfurt – Euro area retail sales rebounded in March but service sector activity disappointed in April with a contraction in France and Spain. Spanish jobless rate declined in April.[/R]

Euro-zone Private Sector Activity Slides

Euro-zone private sector activity declined in April at the fastest rate since October 2011, final data released by Markit showed today.

The composite output index that includes service and manufacturing dropped to 46.7 in April from 49.1 in March and revised from the earlier estimate of 47.4. The euro zone economic activity declined for the third quarter in a row and shrank at 0.5% quarterly rate according to chief economist Chris Williamson of the statistics services provider.

Williamson said in a statement that growth picture has worsened in the region and German economic growth has come to a standstill and France has joined Italy and Spain in “seeing a strong rate of economic decline.”

German Services Sector Grows

The Purchasing Managers'' Index for the German services sector climbed to 52.2 in April from 52.1 in March, final data from a Markit Economics/BME survey showed. The final reading was below the flash estimate of 52.6.

The Composite PMI, which measures the combined output of the manufacturing and services sectors, declined to 50.5 in April from 51.6 in March.

French Service Sector Shrinks

The French service sector contracted in April, final data from Markit Economics showed.

The final business activity index dropped to 45.2 in April, down from the flash estimate of 46.4 and well below the 50.1 logged in March.

Spanish Service Sector Contracts

Spain''s service sector shrank in April as both activity and new business fell at sharp rates, data from Markit Economics showed today.

The headline seasonally adjusted Business Activity Index fell to 42.1 in April from 46.3 in March.

Italian Services PMI Falls

The Markit/ADACI Italy Services Purchasing Managers'' Index declined to 42.3 from March''s 44.3 in March. The latest reading is the lowest in nearly three years.

Spanish Unemployment Declines

Spain''s unemployment rate fell 0.14% in April or by 6,632 from the prior month, the Labor Ministry reported today. The registered unemployment totaled 4.74 million in April.

Norwegian Jobless Rate Drops

Norway''s seasonally adjusted jobless rate dropped to 3.2% in the three months to February from the previous quarter, data released by Statistics Norway showed.

The number of unemployed fell to 85,000 in February from 90,000 in November.

Euro-zone Retail Sales Rebound

Euro-zone retail sales climbed 0.3% from a month ago in March from the 0.2% drop in February, Eurostat said today.

Food sales remained flat from a month ago in March, following the 0.6% rise in February. Non-food product sales edged higher 0.1% in March, reversing a 0.3% fall in February.

In the wider region of EU27, the volume of retail trade increased 0.7% from a month ago, taking the annual growth to 1% in March.

Swiss Retail Sales Climb

Swiss retail sales grew 4.2% from a year ago in March, after rising 0.8% in February, data released by the Federal Statistics Office showed today.

On a monthly basis, retail sales increased 2.2% in March, following a 1.1% drop in February.