Decline in Eurozone Private Sector Economy Accelerates

07 May 2003

“April is the cruellest month,” wrote T S Elliot, although few believe it was the Eurozone private sector economy to which his immortal lines referred. But on the evidence of the latest Reuters Eurozone Purchasing Managers Index they do not seem inappropriate.

The Eurozone comprises the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, The Netherlands and Spain) within the twelve-nation euro currency zone. Produced by NTC Research on behalf of Reuters, the report’s key findings for April reveal …

Goods and Services
The rate of contraction of the private sector economy accelerated slightly as demand for goods and services weakened further in the immediate aftermath of the Iraq war.

The Composite Output Index fell from 48.8 to 48.4 in March to signal a drop in output of the combined manufacturing and service sectors for the second month running. The contraction of output in April was the largest since December 2001. The decline in output was led by services, where business activity fell at the same rate as the sixteen-month high of March. However, output also fell in manufacturing, down for the first time in seven months.

Upward cost pressures eased significantly in April. The Composite Prices Index fell from a two-year high of 58.2 in March to 55.4. Although, at a level above 50.0, the index signalled a further increase in average input costs, the rate of increase was the weakest for three months. The easing was due primarily to the recent fall in oil prices from the war-related highs seen in previous months. Cost pressures weakened in both manufacturing and services.

The Report on Eurozone is a monthly publication featuring original data from surveys of Eurozone purchasing executives in manufacturing and service sectors. For further information and availability, click here

Data sourced from: NTC Research; additional content by WARC staff