Euro zone on track to keep shrinking: Eurocoin
28 June 2013, by Paul Hannon - London (MarketWatch)
http://www.marketwatch.com/story/euro-zone-on-track-to-keep-shrinking-eurocoin-2013-06-28

An indicator that has correctly recorded contractions in the euro zone suggests the currency area's economy shrank for a seventh straight quarter in the three months to the end of June, extending its longest postwar slump.

Official figures for second-quarter economic activity won't be released until Aug. 14, but the monthly Eurocoin measure of euro-zone output released Friday signaled a contraction for June, having earlier signaled declines in activity in April and May.

The measure, which is compiled by the London-based Center for Economic Policy Research and the Bank of Italy, also showed a drop in GDP in each of the three months of the first quarter, an indication borne out later when official data showed the euro-zone economy shrank by 0.2%, the equivalent to an annualized decline of 0.9%.

Following its recovery from a deep contraction in the wake of the 2008 financial crisis, the euro zone's economy first contracted again in the final three months of 2011 and continued to shrink in each quarter of 2012.

The index is one of the earliest measures of growth in the currency area and is consistent with surveys of purchasing managers in manufacturing and services, which also have pointed to a contraction in June.

But while many recent economic data releases and surveys have suggested the contraction is easing and may end soon, the Eurocoin points in the opposite direction.

The CEPR and the Bank of Italy said the Eurocoin indicator fell to -0.18% from -0.15% in May, its second straight month of decline to reach its lowest level since February.

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http://www.marketwatch.com/story/euro-zone-on-track-to-keep-shrinking-eurocoin-2013-06-28