Morning business round-up: Eurozone downturn worsens


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

There was precious little good news around on Thursday, with a succession of gloomy figures being released in Europe and Asia.

Activity at European businesses hit a near three-year low in May, according to a survey by Markit.

Its index, based on a survey of purchasing managers in the manufacturing and service sector, fell to 45.9 in May, a 35-month low. A figure below 50 indicates contraction.

In response, the euro fell to $1.2515 against the dollar, a 22-month low.

A summit of European leaders on Wednesday evening failed to boost confidence, as leaders disagreed over how to tackle the crisis.

French President Francois Hollande pushed for pan-European bonds, that would allow struggling nations to raise money at much lower interest rates.

But Germany says it will oppose such a scheme until there is more budget discipline across Europe.

In the UK, revised figures showed that the economy shrank by 0.3% in the first three months of the year, worse than previously estimated.

Last month's initial estimate from the Office for National Statistics had shown a contraction of 0.2%.

The downward revision was due to a bigger contraction in construction output than previously estimated.

Earlier, figures from China had indicated that the country's manufacturing activity contracted in May, suggesting that the rate of growth in the economy is continuing to slow.

The HSBC Purchasing Managers' Index for Chinese manufacturing fell to 48.7 from 49.3 in April.

The data comes amid fears that a global economic slowdown may hurt demand for China's exports in key markets such as the US and Europe.

Media caption,
Biz Heads

On Wednesday, the government said it would encourage private investment in sectors such as energy, railways and telecommunications.

Brewing giant SABMiller has reported strong profits, helped by strong growth in Latin America.

For the year ending 31 March, SABMiller reported a net annual profit of $5.6bn, up 54% on the previous year.

The results include a one-off gain of $1.2bn from the sale of the company's Russian and Ukrainian business.

Lager sales in North America fell 2% last year and were down 1% in Europe. But that was offset by a 9% rise in lager sales in Latin America.

Harriet Green, currently the chief executive at electronic parts distributor Premier Farnell, will take up the role in July this year.

She will face the task of reviving the travel firm, which last year issued three profit warnings and was forced to take an emergency £200m loan.

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