The euro zone’s business slump deepened at a far faster pace than expected in April, suggesting the economy will stay in recession at least until the second half of the year.

Chinese factories enjoyed their best performance this year, the latest purchasing managers indexes (PMIs) also showed on Monday, but economists focused on the euro zone’s grim outlook which was worse than any projection in a Reuters poll.

The Markit PMI fell to 47.9 from 49.2 in March, a five-month low and confounding the forecast for a rise to 49.3.

Optimism from this weekend’s deal to boost the International Monetary Fund’s crisis-fighting firepower quickly evaporated and worried investors sold the euro and bought safe-haven German and U.S. government bonds.

"Today’s dismal PMI figures clearly indicate that the euro zone economy remains in dire straits," said Martin Van Vliet, senior economist at ING.

"Our base case scenario is still for a gradual return to modestly positive growth in the second half of this year, but with the lingering debt crisis and the ongoing drag from fiscal policy, the risks are clearly skewed to a more protracted recession."

European factories had their worst month since June 2009. Companies said their order books were shrinking and they were cutting jobs in reaction to falling demand.

The overall index slipped further below the 50 threshold that divides growth from contraction.

Politics added to the sense of concern about Europe on Monday. France’s presidential election was thrown wide open by the surprisingly high score of a far-right candidate in the first round vote while the Dutch government was set to resign in a crisis over budget cuts.

The United States is the only Western economy making a significant contribution to global economic growth but surprisingly weak employment data last week raised questions about whether this will continue.