Private sector business activity in the 17-nation euro zone fell in April, extending its decline and adding pressure on the European Central Bank to loosen monetary policy, according to the Markit Flash Eurozone PMI released Tuesday.
The index held at 46.5, the same level as March. Any number below 50 indicates contraction.
"Activity fell sharply again in both manufacturing and services," Markit said. "While the former saw the steepest rate of decline in four months, the latter saw the downturn ease slightly compared with March."
New business in the monetary union fell for the 21st consecutive month, with the rate of deterioration accelerating for the third month in a row.
Germany saw both activity and new business fall at the steepest rates in six months. The drop in German activity was also notable for being the first such decline since last November.
In France the rates of decline in both business activity and new business eased sharply to the slowest rate for four and eight months, respectively.
"In all, further signs that the improvement in market sentiment alone will not be enough to drag the euro zone out of recession," Capital Economics said in a note. "Given this, and the fact that inflation looks set to remain subdued, pressure on the ECB to provide additional policy support looks set to increase."
Mike Obel works as Senior Editor, Copy Chief. Before that he was Markets Editor, assigning, editing and writing about business, markets, finance and economics. Before coming...