Business Still Growing in the Eurozone, But Pace Eases

The pace of business growth eased in October in the Eurozone. Indeed, Germany, the Eurozone's largest and strongest economy saw growth slow to a three-month low. Clearly the weak job market has tempered growth, as employment fell for the 22nd month in a row, with the rate of job losses picking up from September. Such negative employment statistics shows the fragility of the recovery. Weak, Uneven and Fragile continues.

Weak, Uneven and Fragile" remains the the theme of the economic recovery in the Eurozone. The pace of business growth eased in October in the Eurozone. Economic expansion has been broad based across the eurozone, however growth slowed in Germany and France. Yet, Spain is finally seeing growth. On Wednesday, the Bank of Spain said the country's economy had emerged from recession as the economy grew by 0.1% between July and September, growing for the first time in more than two years.

“Weak, Uneven and Fragile” was the title of an article, speaking to the economic recovery in the Eurozone, by this author published on 3 Oct 2013. That theme continues.

The pace of business growth slowed in October in the Eurozone. The preliminary Purchasing Managers' Index (PMI) from research firm Markit fell to 51.5 from 52.2 in September. While a reading above 50 still implies economic growth and expansion, and activity has expanded for four consecutive months row, the decrease indicates slower expansion.

According to Markit, expansion spanned across the Eurozone, however growth slowed in Germany and France. Indeed, Germany, the Eurozone’s largest and strongest economy saw growth slow to a three-month low.

The trajectory for growth across the bloc has been positive for four consecutive months. Indeed, the data indicates that the Eurozone economy expanded at a quarterly rate of 0.2% at the beginning of the fourth quarter, indicating an ongoing but week, recovery.

Clearly the weak job market has tempered growth, as employment fell for the 22nd consecutive month, with the rate of job losses picking up from September. Such negative employment statistics show the fragility of the recovery. The recovery will not stand of a strong footing until employment returns positive.

Indeed, the recovery is uneven. While Germany and France are experiencing slower growth, Spain is finally seeing growth. As discussed in an article by the same author dated 23 Oct 2013, data released by Spain’s central bank shown the Spanish economy is slowly starting to recover.  On Wednesday, the Bank of Spain said the country's economy had emerged from recession as the economy grew by 0.1% between July and September, growing for the first time in more than two years.

After 18 months of contraction, the Eurozone emerged from recession in the second quarter of this year when it grew by 0.3%. However, as we are seeing, the recovery in the bloc remains "weak, fragile, uneven". 


About the author:
Steve Picarillo is an internationally known and respected financial executive, analyst and author. Steve has spent most of his career on “Wall Street” as a lead analyst covering global financial institutions. Mr. Picarillo is currently using his vast knowledge of business, corporate finance, operations and communications as a consultant to large financial institutions, retailers and small to mid-sized business. In addition to being a expert on global banking, Steve is a branding expert, a student of the global economic environment, and a motivational speaker.

Steve publishes several blogs with topics that include discussions on the economic environment and operating a business in this still uncertain economic environment. 

Related websites include www.creativeadvisorygroup.com and www.stevepicarillo.com

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