Analysts and traders are beginning to predict that Europe is heading towards real danger of slipping into a 2nd recession. A slew of reports coming outin recent weeks point towards European services sector declining during the first 2 months of 2012 and manufacturing slipping not far behind. Today a survey European purchasing managers highlighted low activity in some of the most powerful euro block states, including; Germany and France.
This is particularly worrying with the well known decline into chaos in Greece, with neighbouring states Portugal and Spain hot on the heals of economic collapse. In Spain, recent unemployment statistics show 23% of the nations workforce are without employment.
In the UK, the rate of business failure is rising alongside unemployment figures so bad as to force the government to begin debating a significant stimulus package to the get the country’s economy moving and people back into work. Recently, Bank of England leaders spoke out, demanding an additional 50bn GBP be pumped into the economy to ward of risks of recession in 2012.
Leading expert economists report that overall Europe will see zero growth this year, reigniting concerns that we could be witness to at the very least a mini recession as the year moves forward. “The economy remains stuck in low gear,” said Peter Dixon at Commerzbank. “It’s indicative of a flat-lining economy, maybe slightly contracting rather than a major slowdown. It doesn’t bode well for the first quarter.”
In the final quarter of 2011 the European economy contracted by 0.3%, a similar statistic next month will confirm that technical the bloc is in recession. In slightly more positive news, a Reuters poll of leading economists and businessmen suggested Europe will not fall foul of recession but will see a mild downturn followed by slight growth towards the end of the year
Underlying European unemployment rates surpassed 10% at the close of 2011 of last year, the highest shared levels since the introduction of the single currency. Analysts expect to see this peaking at 10.8% before the economies begin to strengthen.
