Services industries from Asia to Europe cooled last month after the euro-area debt crisis pulled economies including Spain and Italy into recession and damped global growth prospects.
The purchasing managers’ index fell to 53.7 in September from 56.3 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing in Beijing said today. That’s the lowest since at least March 2011. In the euro-area, a gauge slipped to 46.1 last month from 47.2 and a U.K. measure also fell. Readings below 50 indicate contraction.
China’s weaker services number underscores a slowdown that spurred the Asian Development Bank to lower its 2012 regional growth estimate. As Europe’s economic slump deepens amid a fiscal squeeze and weakening confidence, the ADB said the threat of a “shock emanating from the unresolved euro-area sovereign debt crisis” is among the biggest downside risks to Asia.
“The global environment will remain challenging,” said Silvio Peruzzo, an economist at Nomura International Plc in London. “In the euro area, there’s a lack of demand because of austerity; some countries have suffered more than others. We expect the economy to shrink again in the third quarter with a significant chance for another contraction in the fourth.”
The MSCI Asia Pacific Index slipped 0.3 percent today. In Europe, the Stoxx Europe 600 Index fell 0.1 percent at 1:14 p.m. in Frankfurt. The euro was little changed versus the dollar, trading at $1.2905.
In Britain, a services measure dropped more than economists forecast to 52.2 in September from 53.7. Markit said the underlying trend in the U.K. economy is near stagnation.
A composite index of euro-area manufacturing and services industries fell to 46.1 from 46.3, Markit also said today. In Germany, the region’s largest economy, France and Italy, the services indicators were all below 50 last month. The gauge for Spain dropped to 40.2 from 44.
“It seems inevitable that the region will have fallen back into recession in the third quarter,” said Markit Chief Economist Chris Williamson. There “seems little scope for a return to growth in the fourth quarter,” he said.