The eurozone appears to have slumped into a recession, indicated a key survey Thursday as it showed economic activity in the region's private sector posting its seventh consecutive monthly contraction in August, according to dpa. The London-based Markit research group said in a preliminary estimate its closely watched purchasing managers' index (PMI) came in broadly unchanged this month at 46.6 points, compared with 46.5 in July. A reading below 50 represents contraction. "The August eurozone flash PMI reinforces the prevailing view of the economy dropping back into recession during the third quarter of 2012," said Markit senior economist Rob Dobson. Based on the July and August readings, Dobson sees the currency bloc's economy contracting by between 0.5 and 0.6 per cent in the second quarter as the region stumbles into its second recession in three years. Leading the fall in the PMI was a slump in the manufacturing sector, with the index for the region's service sector also declining. Worryingly, the PMI showed the rate of decline gathering pace in Germany, which is the 17-member eurozone's biggest economy. "Hopes that German economic strength will aid recovery in the broader currency union were dealt a blow by its rate of economic contraction accelerating, and further signs that its export engine has slammed into reverse gear," Dobson said. However, Dobson said the PMI for France - the eurozone's second biggest economy - showed signs of stabilizing. Data released earlier this month showed that the eurozone's gross domestic product contracted by 0.2 per cent quarter on quarter in the three months to the end of June after stagnating in the first quarter. "In our view, (the PMI) confirms that the decline in eurozone GDP in the second quarter is likely to be the first leg of a technical recession," said ING Bank economist Julien Manceaux.
