European services and manufacturing output contracted for a fifth month this month, suggesting the economy might fail to grow in the current quarter.
A composite index based on a survey of purchasing managers in both industries in the 17-nation eurozone was stable at 46, the same reading as last month, London-based Markit Economics said yesterday in an initial estimate. A reading below 50 indicates contraction.
Europe’s economy is showing increasing signs of weakness after stalling in the first quarter as the worsening fiscal crisis erodes the confidence of executives and consumers. While Greece’s Antonis Samaras was sworn in as prime minister with a coalition that will seek relief from austerity measures, G20 leaders meeting in Mexico this week pushed Europe to step up measures that might contain the debt crisis. Samaras was set to announce the members of his government yesterday as he seeks to keep Greece in the euro and to renegotiate austerity measures.
With governments stepping up spending cuts to plug budget gaps, the economic slump might deepen. European economic confidence dropped for a second month last month and German investor sentiment fell the most in 14 years this month, suggesting Europe’s largest economy is faltering.