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Euro zone activity shrinks again

Thursday, June 21, 2012 - 01:40

June 21 - Business activity across the euro zone shrank for the fifth month straight month in June, Chinese manufacturing contracted and US factory growth slowed. Joel Flynn reports

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The clouds above Europe are darkening. New data shows the downturn in the euro zone's private sector is becoming entrenched - for a fifth month in a row activity has declined . And Markit's Chris Williamson says there's no sign of a let up. (SOUNDBITE) (English) CHRIS WILLIAMSON, MARKIT, SAYING: "There are other indicators in there which have fallen even more sharply, a key one being their service sector expectations for the year ahead. That showed the largest monthly drop since the collapse of Lehmans; in Germany it was the largest fall ever." Several of Europe's politicians have pinned their hopes on growth getting them out of the current crisis. But Chinese factories are also finding it increasingly tough, and U.S manufacturing grew at its slowest pace in 11 months. Standard Chartered's Thomas Costerg says it would help if politicians could agree on a single plan to lead the continent out of crisis. (SOUNDBITE) (English) STANDARD CHARTERED, THOMAS COSTERG, SAYING: "Some, especialy in the south argue that more fiscal stimuli are needed, that countries should help activity in the short term, whereas as some other countries prefer to focus on some longer term issues, competitiveness and some supplyside reforms." Some analysts believe the ECB could be forced to intervene - it's resisted cutting interest rates in recent months. But with uncertainty reigning, particularly over Spain and Greece, pressure on the bank is mounting. The surveys also showed another worrying fact - optimism was at its lowest level since March 2009. Joel Flynn, Reuters.

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Euro zone activity shrinks again

Thursday, June 21, 2012 - 01:40