Eurozone hit by lack of new orders

Markit’s Eurozone Composite PMI, which gauges how thousands of businesses across the region fare each month, rose in May to 47.7 from 46.9, unchanged from a preliminary reading.

Although the index improved for the second month in a row, it has been rooted below the 50 threshold that signals growth for all but one month since September 2011.

Survey compiler Markit said the figures suggest the eurozone’s longest-ever recession will extend into the current quarter with a roughly 0.2 per cent contraction.

“Policymakers and politicians will nevertheless seek solace in the fact that the rate of decline has now eased for two consecutive months, and that Germany is stabilising,” said Chris Williamson, chief economist at Markit.

“Downturns have also eased in France, Italy and especially Spain since earlier in the year.”

Still, Mr Williamson said it was hard to see what could drive a return to growth outright anytime soon, adding stabilisation is perhaps the best the eurozone economy will see in the next few months.

The recession has resulted in the highest unemployment rate in the eurozone’s history, reaching 12.2 per cent and leaving 19.4 million people out of work.

The PMI suggested there was little chance of that being reversed soon, as the composite employment index slipped to 47.2 in May, a three-month low, from 47.4 in April.