Eurozone fears grow as retail sector struggles

28 February 2013

Concerns about the economic future of the eurozone have intensified after the release of a downbeat report regarding the region's retail sector.

Markit's latest purchasing managers' index (PMI) has shown that revenues in the 17-member state economic bloc's retail sector have slumped at a record pace this month.

In a gauge where any score above 50 is indicative of growth, the PMI has slipped to a reading of 44.5 in February - well into negative territory and a marked fall on the rate of 45.9 posted in January.

Year-on-year, this represents the report's worst performance since Markit began compiling the data in 2004 and the body attributed this downward movement primarily to ongoing weakness in the largest eurozone member states.

For instance, the German and French PMIs have slipped to two and six-month lows of 47.6 and 44.3 respectively, while Italy's retail sector also remained deep in contraction at a rate of 40.6.

Trevor Balchin, senior economist at Markit and author of this report, said this is "bad news" for the single currency area, adding: "The retail sector remains some way from stabilization."

By Gary Cooper

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