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Key surveys show slowdown

Tuesday, August 23, 2011 - 01:33

Aug. 23 - Key data suggests euro zone's economy is likely to post near-zero growth in the current quarter through September. Andrew Potter reports.

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Economic growth is stagnating in Europe, according to new surveys of the manufacturing and services sectors. Manufacturing activity - which had been driving the recovery in the 17 nation euro zone shrank for the first time since September 2009. The bloc's dominant service sector was effectively stagnant this month after two years of growth. The flash Purchasing Managers' Index data was actually a little better than had been anticipated. Chris Williamson is the chief economist at Markit which conducted the surveys. SOUNDBITE: CHRIS WILLIAMSON, MARKIT CHEIF ECONOMIST, SAYING (English): "Not to be too gloomy but order books just fell into contraction territory. For the first time in two years across manufacturing and services, there's a decline in demand for goods and services signalled here." This will give little relief to policymakers struggling to contain the region's debt crisis and only adds to signs that an economic slowdown is spreading beyond the periphery and taking root in core members of the bloc, including Germany. Earlier data from Europe's largest economy showed its manufacturing sector grew faster than expected but growth in its service sector virtually ground to a halt. The latest ZEW survey showed that German investor sentiment saw its biggest one-month drop in five years in August, diving to its lowest level since the aftermath of the Lehman Brothers' collapse. Markets largely shrugged that off - and the euro also made advances. Andrew Potter, Reuters

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Key surveys show slowdown

Tuesday, August 23, 2011 - 01:33