Euro-area services and manufacturing output contracted more than economists forecast in October and German business confidence dropped to the lowest in more than 2 1/2 years as Europe’s recession deepened.
A composite index based on a survey of euro-area purchasing managers in services and manufacturing fell to 45.8, the lowest in more than three years, from 46.1 in September, London-based Markit Economics said today. Economists had forecast a reading of 46.5, according to a Bloomberg News survey. A separate factory index in China rose. In Germany, the Ifo institute’s business climate index unexpectedly dropped to 100.0 from 101.4 in September.
The ECB said in its quarterly projections published on Sept. 6 that the euro-area economy may contract 0.4 percent this year instead of a previously estimated 0.1 percent. That’s in line with the IMF’s latest forecast. Both institutions cut growth projections for next year.