Shrinking eurozone output suggests recession in second quarter The eurozone is likely to remain in recession in the second quarter, a business survey showed on Thursday, with both France and Germany, the two biggest economies, still in contraction territory. The initial reading of the Markit eurozone Purchasing Managers" Composite index for both the manufacturing and services sectors rose to 47.7 in May from 46.9 in April. That beat market expectations for the indicator but remained firmly short of the 50.0 level separating growth from contraction. While country-specific readings for Germany showed it was at best stagnating, with a reading of 49.9, up from 49.2 in April, the broad-based downturn in France remained fierce. The French composite manufacturing and services index was unchanged at 44.3 in May. The data will feed into a debate on whether the European Central Bank is doing enough to help stimulate a recovery in a region beset by record unemployment and stuck in the longest recession since the euro was created. "The ECB's quarter-point cut in interest rates seems to have done little to inspire confidence that the economy will start to pick up again," said Chris Williamson, chief economist at Markit. The data group said there were signs of companies cutting prices in an effort to stimulate sales with the largest drop in manufacturing output prices since January 2010 recorded in the survey of about 5,000 eurozone businesses. The prospect of a weak recovery later in the year for the eurozone hinges to a large extent on the global economy. Bad news out of China on Thursday showed industrial activity contracting, according to one business survey. The HSBC PMI survey for the manufacturing sector was on track to fall to a seven-month low of 49.6 in May from 50.4 the previous month. Despite the gloom, the slowing pace of contraction in the eurozone provided some limited scope for optimism. "But let's not get carried away," said Evelyn Herrmann, economist at BNP Paribas. The underlying growth momentum is still far from being positive.