By Hugo Duncan
PUBLISHED: 06:53 EST, 25 May 2012 | UPDATED: 06:53 EST, 25 May 2012
The storm clouds hanging over the global economy darkened yesterday as a raft of data showed output slowing around the world.
Bleak news from the United States and China added to the gloom in Britain and the eurozone as confidence drained away.
‘The world economy is in the intensive care unit now,’ said Chilean finance minister Felipe Larrain in a sign that the pain is being felt around the globe.
‘There is no economy that is immune to what is happening in Europe.’
Official figures in Britain showed the economy shrank by 0.3 per cent in the first quarter of the year – more than the 0.2 per cent previously thought.
It followed a 0.3 per cent slump in the final three months of 2011 and left the UK stuck in its first double-dip recession since 1975.
In the eurozone, business suffered its steepest decline for nearly three years in May as the malaise spread from the periphery to Germany and France.
Research group Markit said its index of private sector activity – where anything below 50 signals decline – fell from 46.7 in April to 45.9 this month.
Chris Williamson, chief economist at Markit, said it was the weakest reading for 35 months and pointed towards a 0.5 per cent slump in economic output across the eurozone in the second quarter of the year.
Manufacturing growth in the US also slowed, with the index down from 56 in April to a three-month low of 53.9 in May.
Recession in parts of Europe and the slowdown in China hurt American exports.
China’s once booming factories suffered a seventh straight month of decline.
The US and China are the world’s two biggest economies. ‘We are very much in a period of weakening global growth,’ said Peter Dixon, an economist at Commerzbank. ‘It doesn’t quite feel like 2008 yet but the danger is we could get there quicker than we think.’