As revealed by the latest statistical reports, the rate of unemployment in the eurozone has risen to a record high in May amid an increasingly weakened manufacturing sector.
Figures churned out by EU statistics body Eurostat, a staggering number of 17.56 million people do not have any jobs at the moment, which amounts to an unemployment rate of 11.1%.
Experts say the latest data represent a bleak picture for the eurozone economy where a number of firms have cut their budgets and spending targets out of fear that the ongoing debt fiasco across Europe can significantly affect future growth prospects.
The Eurostat survey was found consistent with results from Markit’s Purchasing Managers’ Index (PMI), the June readout of which showed contraction in the manufacturing sector.
Out of the 17 blocs in the eurozone, Spain has the most severe rate of unemployment with 25% of its citizens being jobless. The condition prevailing in Spain, along with that in a few other countries, has shown no signs of improvement over the past 14 months.
As companies continued to struggle with their employee retention issues, job cuts accelerated over a period of two and a half years starting from January 2010, stamping down the Purchasing Managers’ Index from 47.1 in May to 46.7 the following month, reports noted.
“Companies are clearly preparing for worse to come, cutting back on both staff numbers and stocks of raw materials at the fastest rates for two-and-a-half years”, chief economist at Markit Chris Williamson said.