-Chris Williamson, chief economist at Markit
The 17-nation economy remains weak and is still struggling to grow, with business activity, services PMI and retail sales edging down. Markit Economics said on Wednesday that output in the Eurozone' service sector deteriorated in May, with the final services Purchasing Manager's Index falling to 47.2 in May, after standing at 47.5 in the prior month. Final Eurozone Composite Output Index stood at 47.7 last month, edging slightly up from 46.9 in April. Despite some improvement, activity in the sector is still contracting, indicating weak domestic demand.
Also on Wednesday, the European Union's statistics office confirmed that the region's GDP tumbled 0.2% quarter-on-quarter in the January-March period, while on a yearly basis the economy contracted 1.1%. At the same time, retail sales fell 0.5% on a monthly basis in April, data below analysts' forecasts who claimed for only a 0.1% monthly fall. Eurostat data also showed there was a positive contribution from Eurozone net trade in the first quarter, but only as imports declined more than exports - another signal of very weak domestic demand. Even despite the fact the downturn has eased in several countries, the Eurozone economy is still not expected to return to growth outright anytime soon.
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