Thursday, 8 April 2010

Eurozone economy flat in fourth quarter

It turns out that the euro area did not grow in the fourth quarter. Bloomberg reports:

Europe’s economy unexpectedly stagnated in the fourth quarter as companies cut spending more than previously estimated.

Gross domestic product in the 16-nation euro region remained unchanged compared with the third quarter, when it rose 0.4 percent, the European Union’s statistics office in Luxembourg said today. It had previously reported a fourth- quarter expansion of 0.1 percent. Corporate investment dropped 1.3 percent instead of the 0.8 percent estimated earlier.

But growth could be picking up again. From another Bloomberg report:

Europe’s services and manufacturing industries expanded at a faster pace than initially estimated in March as companies stepped up output to meet global orders.

A composite index based on a survey of euro-area purchasing managers in both industries rose to 55.9 from 53.7 in February, London-based Markit Economics said today. That’s the fastest pace since August 2007 and above an initial estimate of 55.5 published on March 24. A reading above 50 indicates expansion...

An index of services, which account for about 60 percent of the region’s gross domestic product, rose to 54.1 in March from 51.8 in the previous month, Markit said. That’s above the initial estimate of 53.7 and the fastest pace of expansion since November 2007. A gauge of manufacturing increased to 56.6 from 54.2.

Data out of the UK on Wednesday were mixed. Reuters reports:

[T]he CIPS/Markit purchasing managers' index showed the country's services sector expanded less than expected in March.

The reading slipped to 56.5 from February's three-year high of 58.3.

Separate figures from the Office for National Statistics showed services output fell in the first month of the year at its fastest monthly pace since August.

A survey from the British Chambers of Commerce showed export balances for both services and manufacturing firms improved at the start of this year. However, investment balances worsened and confidence remained low by pre-recession standards...

Another survey, from the Recruitment and Employment Confederation, showed the number of people placed in permanent jobs rose last month at the fastest rate since October 1997.

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