Business activity in the euro area has slowed

Business activity in the euro area has slowed more than expected this month, while the manufacturing sector in the two largest Asian economies began to shrink, reports Reuters. This signals that the global economic recovery will not be as smooth as expected.
A surprising drop
Unexpected decline in the composite index of managerial orders (PMI) in the euro area due to a sharp decrease in new orders for industry in France and Germany. This is the first important indicator for the euro area economy, which gives disappointing results in months. Weak data are particularly striking against the background of the ongoing month ago Program for the purchase of securities of the European Central Bank, which aims to stimulate the economy.
Tax Return OnlineIn April PMI index fell to 53.5 points compared to 54 in March. The average analyst estimate was for a rise to 54.4 points. The index still remained above the level of 50 points, which separates contraction from growth. It is particularly notable slowdown in orders for industry in France and a similar trend is observed in Europe's largest economy and biggest exporter Germany. That could be judged that there would be further delays in activity. PMI indices of services sector in France and Germany also are lower than even the lowest estimates, but throughout the euro area results are better.
Economists still expect the data to the smaller countries of the monetary union to continue to improve. "The data from individual countries so far shows that the periphery of the eurozone is doing relatively well. It is very likely their PMI indexes show greater sustainability," said Marco told Reuters Valley, an analyst at Unicredit.
Problems in Asia
In Asia's biggest economy China PMI index of manufacturing sector fell to a year low of 49.2 points. Economists had expected the index to remain at the level of the previous month - 49.6 points. These data reinforce market expectations Peko to take new measures to stimulate growth, including further loosening of the monetary policy of the central bank.
In Japan PMI index fell to 49.7 points in April from 50.3 the previous month. Although industrial production to decline for the first time since July 2014, the sector has seen employment growth. Despite the slowdown is not expected the central bank to introduce changes in its policy, which already includes huge financial incentives.