Europe’s Economy Look Like Its Turning Around Thanks To Germany
For the last 18 months European news has been little more than worry and fervent discussion on how to make the 17-nation currency block known as the eurozone from breaking apart due to economic difficulty. One default and bailout after another, concerns of solvency and many of the nation’s willingness to adhere to the imposed austerity measures, kept the world on its toes. 2nd quarter, the Eurozone broke its 18-month losing streak, growing by 0.3% second quarter. Additionally, the preliminary news indicates that the growth pattern could continue in July-September.
European Economic Markers Showing Signs Of Improvement
Another good sign for the Eurozone is the results of the Markit survey of business activity. In August, that survey jumped up to the highest level it has seen since two years ago. Manufacturing and the services industry are also up from two years ago. These strong economic markers had a profound impact on the markets, which sent European stock markets up in yesterday’s trading. Both Germany’s DAX and France’s CAC 40 showed gains of over 1%. If the growth rate continues the 3rd quarter has the potential to be the best quarter for economic and business growth since spring of 2011.
Germany’s Manufacturing Sector At 26-Month High
Another factor that is helping to drive the economic improvement in the Eurozone is the powerhouse country of Germany. In August, Germany’s manufacturing index hit a 26-month high. Rising demand for both domestic and exported goods promoted much of the increase in the manufacturing sector.
Many Eurozone Countries Still Doing Poorly While The Rest OF The Eurozone Showing Improvement
One of the concerns facing the Eurozone, is France’s current economic state. As the second largest economy in the eurozone, France’s performance has a big impact on the rest of the Eurozone. In August, private sector output fell, and both their manufacturing and services industry did poorly. Greece, Spain, and many other struggling countries are still looking at a huge percentage of unemployed workers, particularly for the young adults who are looking at nearly 50% unemployment. This record high unemployment continues to weigh in hard on consumer spending. It also raises questions on the solidarity of the Eurozone when many of the countries are still looking at poor economic statistics. There are also four eurozone countries who are stilly relying upon bailouts from the IMF and the EU to keep afloat. They include Greece, Portugal, Ireland and Cyprus. With debt still at 90% of GDP in the overall Eurozone, austerity is sure to continue for several years to come.
For more information on how the overall health and wealth of the Eurozone impacts your personal investments and the global economy in general, speak to a Redhawk Wealth Advisor near you today.