Today's Coming Crisis Movie

Saturday, July 23, 2011

Eurozone debt fears hit business and consumer confidence

A collapse in business and consumer confidence across the eurozone brought a dramatic slowdown in July, with business surveys indicating that the region almost stopped growing.

Worries about the sovereign debt crisis and fears of a downturn in world trade undermined economic activity, which until recently was rising steadily, driven by strong German exports.

The Markit Flash Eurozone PMI (purchasing managers' index) sank to 51.4 this month from 53.7 in June, its lowest level since September 2009 and falling far short of expectations for 53.0. It has been above the 50 mark that divides growth from contraction for nearly two years.

The manufacturing PMI fell to 50.4 from 52.0 in June, its lowest reading since September 2009 and missing consensus expectations in a Reuters poll for 51.5.

Chris Williamson, chief economist at Markit, which compiled the surveys, said: "The eurozone recovery lost almost all of its momentum in July, recording the weakest growth since August 2009 when the recovery first began.

"Excluding the financial crisis, the July survey was the most downbeat since the Iraq war in 2003, and consistent with a flat trend in quarterly gross domestic product." (more)