The fact that a meagre level of projected growth for the first quarter of this year of between 0.4 and 0.5% in the Eurozone would be the bloc’s best performance since June 2011 really tells the story of how deep the economic slump triggered by the Global Financial Crisis has been.
The Eurozone exited an 18 month recession as recently as the second quarter of last year. Traditionally, a period of recession is usually followed by a strong recovery, marking the end of an economic cycle, but not this time. Recovery has been weak, both in Europe and the wider world and has edged forwards in fits and starts. Unemployment in the Eurozone remains near a record level of 12% - one in eight of the workforce – with some specific Eurozone nations seeing more than twice that average (Spain and Greece) and still others only a third of it (Austria).
Still, let’s enjoy the good news whilst we may. The projection comes on the back of the February Markit Eurozone Composite Purchasing Managers’ index (PMI), a barometer were a reading below fifty denotes foul weather (contraction) and above it, the halcyon golden summer days of economic growth. February’s value came in at a whacking 53.3, beating analysts’ expectations of a modest 52.7.
Data from Eurostat have confirmed that the Eurozone expanded in the final quarter of 2013, growing by a very modest (but none the less welcome) 0.3%. Their analysis shows that growth was “boosted” by rising exports to Eurozone trading partners and improved inward investment to the bloc.
The performance of Eurozone heavyweights France and Germany continues to be contrasted. The German PMI figure came in at 56.4, its best value since 2011, whilst the French figure showed continued contraction in the Eurozone’s second largest economy, returning a figure of just 47.9.