This month, manufacturing and services in Europe dropped at a faster pace than analysts’ predictions, as the economy is still struggling to recover.

Data shows that economy in Europe continued to drop at the beginning of 2013 after the recession got worse during the fourth quarter. Services industries in France and Germany, Europe’s two biggest economies, reported worse than expected results in February. The European Central Bank predicts that economy in Europe will fall 0.3% in 2013.

Today’s report “puts a dent in hopes that the region would emerge from recession in the first quarter,” said Ben May, an economist at Capital Economics Ltd. in London. “It supports our view that the improvement in the financial markets will not be enough on its own to kick-start an economic recovery.”

Analysts predict that during the first quarter economy will drop 0.1%, before returning to profit in the three month through June. Declines in Europe only suggest that automakers will have to reduce vehicle output by 7% more in 2013. In 2012 auto sales in Europe dropped to the lowest level in the past 17 years, as the increasing unemployment levels discouraged big purchases.


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