Business activity in the euro zone slumped to the lowest level since July 2003, according to a widely watched survey today.
NTC Economic's euro zone's purchasing managers' index (PMI) pulled back to 51.1 points in May from 51.9 in April, confirming an initial estimate. A figure above the 50-point level indicates a growth in activity, while any figure below it signifies a contraction.
Firm business activity in Germany, and to a lesser extent in France, failed to offset weakness in Italy and Spain, according to the survey.
NTC also said that its euro zone PMI for the service sector fell dangerously close to the 50-point level in May, slipping back to 50.6 points from 52.0 points in April, also unchanged from an initial estimate.
Economists said that the data cast a pall over the economic outlook for the euro zone.
Separate figures showed that retailers in the euro zone saw their sales slump in April for the third month running, confounding economists' expectations for an improvement.
The volume of retail trade in the euro zone tumbled 0.6% in April from March and dropped 2.9% over 12 months, the European Union's Eurostat data agency said. Analysts described the April figures as 'pretty awful'.
The data fell far short of economists forecasts for retail sales to rise 0.7% over one month and 2.2% over one year.
The April slump followed on the heals of weak sales in March when euro zone retail trade fell 0.9% over one month and 2.3% over one year, according to Eurostat.
