Eurozone Hopes for Return to Growth Fade in Wake of PMI Data!

• Eurozone hopes for return to growth fade in wake of PMI data! 
  by Larry Elliott, economics editor, The Guardian 
  Hopes of a rapid return to growth in the crisis-hit eurozone faded  on Thursday after news of deteriorating business conditions in both the manufacturing and services sectors.
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  Despite the easing of financial tensions since the middle of 2012, the latest purchasing managers’ index (PMI) for the 17-nation single currency zone fell back in February, reversing the upward trend of the previous two months. France fared particularly badly, prompting a warning from one analyst that the performance of the eurozone’s second largest economy is more in line with the bloc’s periphery than with Germany.
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  The survey by Markit said a weak service sector was the main reason its PMI  fell from 48.6 to 47.3 this month – below the 50 level that marks the cutoff point between contraction and expansion.
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  Ben May, European analyst at Capital Economics, said the PMI was consistent with output in the eurozone economy falling by a further 0.3% in the first three months of 2013, following a 0.6% decline in the final quarter of 2012.
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  Financial markets, which had been expecting an improvement in the PMI, drove the euro lower following the survey’s publication. The single currency lost ground against both the dollar and the yen.
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  Analysts were particularly alarmed by the worsening state of the French economy, where business conditions dropped to their weakest level since the nadir of the global recession in early 2009. France’s PMI dropped from 42.7 to 42.3 in February, a level that economists said pointed to a 1% drop in gross domestic product in the first quarter of 2013. Germany’s PMI also fell, but even after the drop from 54.4 to 52.7 the latest Markit health check suggested that growth would resume after the 0.5% drop in late 2012.
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