The Eurozone downturn has intensified according to the March PMI (Purchasing Managers' Index) data released Wednesday from Markit as the region registered its steepest rate of contraction in the last four months.

Specifically, Markit reported that the Eurozone Composite PMI for the month of March unexpectedly fell to 46.5 from February's 47.9, missing the 48.2 consensus estimate.

Markit notes that with the exception of a marginal increase in January of last year, business activity has fallen continually since September 2011.

Manufacturing output fell in March at the fastest rate since December, while business activity in the service sector suffered the steepest decline since October.

Companies also reported that new business levels fell at the strongest rate for three months, while employment dropped for the fifteenth successive month although the rate of job losses eased in both manufacturing and services.

Although Markit Chief Economist Chris Williamson pointed out that the deterioration in the business environment suggested that the pace of economic decline has eased since the fourth quarter, he warned that "the concern is that the downturn has gathered pace again".

Williamson further noted that a return to contraction in Germany was a worrying sign and that the outlook for the Eurozone is grim.

"The deteriorating situation in Cyprus also raises the prospect of business and consumer confidence falling further across the single currency area and possibly dragging the PMI numbers down further in April", Williamson concluded.

JM

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