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20 Nov, 2014 15:51

​Eurozone manufacturing outlook weakest for 16 months, as France, Germany lose steam

​Eurozone manufacturing outlook weakest for 16 months, as France, Germany lose steam

A new survey of manufacturing and service companies across the eurozone shows the area is now a step away from recession, as key economies France and Germany remain weak.

The speed of growth in the eurozone slowed down in November, according to the preliminary Markit Purchasing Managers' Index (PMI) released Thursday.

READ MORE: Europe needs new policy to escape deeper crisis – BRIC ‘prophet’

The eurozone's composite PMI came in at 51.4, the lowest in 16 months. Analysts had expected the figure to come in at 52.3 overall, an improvement from October's 52.1. The figure is still above the neutral 50 mark, anything below that signals recession.

France and Germany remain the main drags on the European economy.

The report said France remained a "key area of weakness," suffering a drop in business activity for a seventh consecutive month and a further month of job cuts. The country’s PMI index has remained below 50.0 since May.

Germany's manufacturing PMI dropped to 50.0 in November, down from 51.4 in October and the weakest since July 2013.

READ MORE: German business blues as confidence hits 6-month low

Germany is an export-oriented economy and has been largely hit by tit-for-tat sanctions with Russia over the Ukraine crisis.