Europe economy

  1. Eurozone growth lukewarm as France and Italy shrink

    Shipyard welder

    Eurozone GDP growth slowed to 0.1% quarter-on-quarter in the last three months of 2019, dragged down by France and Italy.

    The EU's statistics office, Eurostat, said growth for the period in the 19-country area was 0.9% year-on-year, a downward revision from the previously estimated 1% growth.

    The quarterly growth rate was down from the 0.3% expansion seen in the third quarter because of a 0.1% contraction in the second-biggest economy, France, and a 0.3% contraction in the third-biggest, Italy.

    As we told you earlier, German growth stagnated.

  2. Coronavirus 'a cause for concern'

    Christine Lagarde

    Eurozone growth remains modest but there are tentative signs of stabilisation, even if the coronavirus outbreak in China clouds the horizon, European Central Bank President Christine Lagarde has told a parliamentary hearing.

    Ms Lagarde said ECB support was still needed to shield the currency bloc from global headwinds.

    "While uncertainties surrounding the global economic environment remain elevated, those related to trade tensions between the US and China are receding," Ms Lagarde said in comments that largely reflect earlier ECB statements.

    "Other risks, however, are still lingering or – such as the uncertainty surrounding the impact of the coronavirus – are a renewed source of concern," Ms Lagarde told the European Parliament's committee on economic affairs in Brussels.

  3. German factories fear coronavirus impact

    ThyssenKrupp steel factory in Duisburg

    German factory owners are less gloomy than they have been in recent months, but they are still feeling the pain of the US-China trade war and they fear weaker exports because of the coronavirus outbreak in China.

    That's the verdict from IHS Markit, which has just released its January Purchasing Managers' Index (PMI) for Germany's manufacturing sector. The figure rose to 45.3 after falling in December, which means it contracted at the slowest pace in 11 months.

    However, it was the 13th month that it stayed below the 50 mark, which indicates growth. Manufacturing accounts for about one-fifth of the German economy, which is the largest in Europe.

    China is Germany's biggest trading partner and Markit said the spread of the virus would hurt German business sentiment.

  4. Eurozone manufacturing and services output 'stable'

    The latest PMI surveys for the Eurozone show that manufacturing and services output growth remained stable and at a modest pace in January, with IHS Markit's Eurozone Composite Flash Purchasing Managers' Index (PMI) remaining unchanged at 50.9.

    IHS Markit said that France and Germany's economies were both seeing a recovery with combined output growth at a five-month high, but in other countries growth of business activity slowing to near-stagnation.

    However business confidence across the single-currency area jumped to a 16-month high.

    “Overall, a stable picture for both growth and inflation will likely reassure the European Central Bank that they are safe to keep monetary policy fixed for now while carrying out a strategy review," said IHS Markit's associate director Andrew Harker.

    View more on twitter
  5. Eurozone economy 'stuck in crawler gear'

    VW car production

    While the latest PMI surveys for the UK indicated both the services and manufacturing sectors contracting in December, the news from the eurozone isn't that much better.

    IHS Markit's eurozone Composite Flash Purchasing Managers' Index (PMI), remained unchanged at 50.6 in December. That's just above the 50 mark which separates expansion from contraction.

    “The eurozone economy closes out 2019 mired in its worst spell since 2013, with businesses struggling against the headwinds of near-stagnant demand and gloomy prospects for the year ahead," said Chris Williamson, chief business economist at IHS Markit.

    “The economy has been stuck in crawler gear for fourth straight months, with the PMI indicative of GDP growing at a quarterly rate of just 0.1%.

    “There are scant signs of any imminent improvement. New order growth remains largely stalled and job creation has almost ground to a halt, down to its lowest for over five years as companies seek to reduce overheads in the weak trading environment and uncertain outlook."