Eurozone activity slows further

Private sector business activity in the eurozone showed a seventh monthly decline in August, a survey showed on Wednesday, led down by manufacturing as the debt crisis pushes the region into recession. The closely-watched Purchasing Managers Index (PMI), a survey of 5,000 eurozone businesses compiled by Markit research firm, came in at a final 46.3, down from an initial estimate of 46.6 and the 46.5 figure in July. Any reading below 50 indicates contraction in activity. The final August data leave the "eurozone economy on course to fall back into technical recession in the third quarter," Rob Dobson, Senior Economist at Markit, said in a statement. "Sharp declines in new orders at manufacturers and service providers, plus further job losses, mean that there is little prospect of a sustained improvement in economic conditions over the near-term," Dobson added. Dobson noted some modest improvement in Ireland, Italy and Spain but problems in Germany, Europe's biggest economy, were a worry. "The looming concern is the increasing signs of weakness coming out of Germany, the nation others were looking to as a pillar to prop up growth in the broader currency region," he said. "With its export engine in reverse gear and domestic demand faltering this is looking less likely as the year progresses. If the core nations falter, the outlook for the periphery will surely worsen," Dobson added. Germany's PMI stood at 47 in August, its lowest in 38 months, with France at 48, a two-month high, Italy at 43.5, the best for three months and 43.4 in Spain, the highest in five months. In contrast, bailed-out Ireland was in positive territory, hitting 51.4 in August for a two-month high.