2012.05.24 10:37:10 DATA SNAP: Euro-zone Business Activity Steepens Decline In May

By Alex Brittain Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Euro-zone business activity Thursday shrank at its steepest rate in nearly three years in May, compounding fears that the economy is sinking a day after European leaders failed to agree on ways to boost growth and fight the debt crisis at their latest summit. The preliminary composite purchasing managers index for the 17 nations that use the euro fell to 45.9 in May from 46.7 in April, data company Markit Economics said. That was the fourth straight decline and the lowest reading since June 2009, when the euro zone was last in recession. The index compiles survey results from purchasing managers in both manufacturing and services. A reading below 50 means activity is contracting month-to-month. Signs of weakness in euro-zone business activity added to a poor reading on German business sentiment. The Ifo Institute said its confidence index for Europe's biggest economy fell to 106.9 in May from 109.9 in April, dented by uncertainty around the euro zone as a whole. Official data earlier Thursday showed French business sentiment also dropped sharply in May. Of the PMIs, France's was markedly weak, falling to a three-year low of 44.7 in May from 45.9 in April. The index for Germany performed better, contracting slightly with a reading of 49.6 from 50.5 in April. -By Alex Brittain, Dow Jones Newswires; +44 20 7842 9203; alex.brittain@dowjones.com (END) Dow Jones Newswires May 24, 2012 04:37 ET (08:37 GMT)