Eurozone: Small glimmer of hope for the economy

From February 2018 onwards the Euro-Indikator fell without interruption for 11 consecutive months. In January 2019 it rose again for the first time – albeit only marginally. Compared with the figure for December, the DZ BANK Euro-Indikator edged up 0.1 percent and it now rests at 99.1 points as compared to 99.0 in December. Its rate on the prior year remained unchanged at -2.4 percent. It bears considering here that in January there was a slight revision in the entire time series for the Euro-Indikator attributable to the European Commission having altered the way it calculates consumer confidence.

With the new calculation method for the indicator for consumer confidence, the European Commission has for the first time since 2001 revised its survey-based time series with a view to improving its predictive qualities as regards private consumer spending. The estimates for private households as regards the development of their personal financial situation now play an even greater role in the calculation of the indicator. Having fallen clearly in December, the new time series for consumer confidence posted a slight rise in January again. Although consumers were slightly more pessimistic on the month in terms of the general economic situation, they discern prospects that their personal financial situation will improve and also demonstrate a greater propensity to spend larger sums.

Positive news also comes from the labour market, where the number of vacancies recently increased again. The number of building approvals likewise continued upwards in January.

In the industrial sector, the leading indicators have, by contrast, dimmed further. The decrease in order receipts was only minimal on the month, while production expectations for the coming months have fallen to the lowest level in about two and a half years. The current survey of purchasing managers in the manufacturing sector indicates that growth in this sector has of late fallen to almost zero. The weakening continues to be due mainly to the key sector of exports, where the order index is at a 68-month low.

On the Euroland stock markets, following the sharp downward trend in the course of 2018, things turned north for the first time in January 2019. The MSCI share index was on average for January only 1.1 percent higher than in December, but compared to the end-of-month figure four weeks earlier was actually almost seven percent higher. In other words, a little more investor confidence is to be felt.


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