Eurozone private sector slips back: PMI survey

(BRUSSELS) - Eurozone private sector activity fell back in February after returning to growth in January, a key survey showed Wednesday, stoking concerns the region is flirting with recession.

The composite purchasing managers' index (PMI) for services and industry compiled by the research firm Markit fell to 49.7 points in February from 50.4 points in January but was still up from 48.3 points in December.

Any score in the survey of 4,500 manufacturing and services firms above 50 points indicates growth, while a score below indicates contraction.

In the services sector alone, the January index reading slipped to 49.4 points from 50.4 points while in manufacturing there was a slight improvement, to 49 points from 48.8 points.

Markit chief economist Chris Williamson said the outcome was disappointing and highlighted the continued risk that the eurozone could fall back into recession.

The 17 nation bloc's economy shrank 0.3 percent in the fourth quarter of 2011, according to recent data, and a second consecutive quarterly contraction would meet the accepted technical definition of recession.

Williamson said a convincing return to growth required a clear improvement in demand in the coming months.

"The pause in the recovery of the PMIs was most marked in Germany, where both sub-indices fell, while France sent a mixed picture and the rest of the eurozone was broadly unchanged at low levels," Berenberg Bank senior economist Christian Schulz noted.

"Yet, despite the continuing risks around Greece even after the agreement of a second bail-out package, an economic recovery in the summer remains likely," he added.