Eurozone private sector activity fell sharply in April, with powerhouse Germany grinding to a halt and the bloc's weaker southern members struggling badly, a key survey has showed.
The Purchasing Managers Index (PMI) compiled by the London-based research firm Markit fell to 46.7 points in April, well down from an initial 47.4 estimate.
After logging 49.1 points in March, April marked one of the steepest slides since the depths of the global financial crisis in 2008-09 and the sharpest decline in six months.
The closely watched indicator of services and manufacturing has a boom-or-bust line of 50, confirming other recent data showing the 17-nation eurozone is now likely deep in recession.
A separate Markit survey published earlier this week showed the April adjusted manufacturing PMI falling to 45.9 from 47.7 in March.
Yesterday's report put the services sector PMI at 46.9, down from the initial estimate of 47.9 and the 49.2 recorded in March.
Markit said that eurozone trade was 'especially weak' as orders fell away.
After Italy's score plunged to a 36-month low of 42.7, Markit chief economist Chris Williamson said the result would translate into a quarterly fall in gross domestic product (GDP) of 0.5 per cent.
'Business and consumer confidence appears to have deteriorated markedly across the region since the uplift seen at the start of the year,' he said. “The stimulus measures implemented by the European Central Bank have not had a lasting impact on the real economy,' Mr Williamson warned against a backdrop of calls for the authorities to focus on growth instead of austerity.
'Little can be said to remain of any 'core' of strength in the region,' he added. Battling a relentless debt crisis, the eurozone economy shrank 0.3 per cent in the fourth quarter of 2011 and most analysts believe it contracted further in the three months to March to put it into recession.
A recession is defined as two consecutive months of economic contraction. Christian Schulz, senior economist at Germany's Berenberg Bank, highlighted a string of weak national trends, noting that French firms were 'worrying about post-election austerity'.
The data, he said, 'confirms the need to focus on pro-growth structural reforms to offset the harsh impact of austerity'.