Eurozone private sector activity slumps further

Private sector business activity in the 17-nation eurozone fell sharply in March, adding to an increasingly gloomy outlook for the economy, a key survey showed on Thursday. The Markit Eurozone Composite Purchasing Managers Index dropped to 46.5 points in March, unchanged from the initial estimate but well short of February's 47.9 and the boom-bust line of 50 points. Markit said the downturn was now accelerating at its fastest rate since November, confounding hopes that the worst of the debt-crisis slump was over. The report will fuel concern that "the eurozone downturn shows no signs of ending," Chris Williamson, Markit's chief economist, said in a statement. "The recession is deepening once again as businesses report that they have become increasingly worried about the region's debt crisis and political instability," Williamson said. Continued uncertainty in Italy was "commonly cited as a key factor clouding the economic outlook," he said, adding that the "botched bail-out of Cyprus could well filter through to a further worsening of business sentiment ... in April." Williamson noted too that "growth almost stalled in Germany, which suggests that the only source of bright light in an otherwise gloomy region has once again begun to fade." The March index reading for Germany, Europe's biggest economy, hit a three-month low of 50.6 points to leave it just in positive territory. France was stuck at a 48-month low of 41.9 points while Italy was on 44.9, a two-month high. Markit's Eurozone Manfacturing PMI survey released earlier this week painted a similarly bleak picture of a faltering economy where unemployment now runs at a record 12 percent.