Eurozone Economy at Ten-Month high in June

06 July 2007

HENLEY-ON-THAMES, UK: The private sector economy in the Eurozone - the eight largest European economies within the twelve nation euro currency area - continued to expand at a strong rate in June.

Between them these eight countries (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) account for an estimated 92% of business activity within the zone

The Royal Bank of Scotland's Eurozone Composite Output Index rose to a ten-month high of 57.8 in June, up from 56.8 in May, indicating the first acceleration in growth for four months.

Each of the big-four euro countries saw an acceleration of growth in June. Germany recorded the strongest gain, with growth rising to a five-month high, having led the big-four on average in both Q1 and Q2 of this year.

Meanwhile, growth rose to three- and ten-month highs in France and Italy. Growth also rose to a three-month high in Spain, but was nevertheless the slowest of the big-four.

Key data from the June 2007 report follows . . .

  • New Business
    An increased rate of new business growth caused backlogs of work to show the largest rise for seven months.

  • Employment
    Growth of employment accelerated to a 12-month high. The latest rise was the second-strongest seen since the dotcom boom years, surpassed only by last June's soccer World Cup-related peak. All big-four euro countries saw a solid rise in employment, led by Germany and France.

  • Cost Inflation
    The overall rate of input cost inflation recorded by private sector firms was the fastest since January. High energy prices, higher interest rates and upward wage pressures in particular were reported to have boosted average costs in June.

  • Price Inflation
    Average prices charged for goods and services rose at a slightly faster rate than May's six-month low as firms passed on higher costs to customers. But the rate of increase remained below the 2007 average.
The PMI (Purchasing Managers' Index) Report on Eurozone is produced for The Royal Bank of Scotland by NTC Research.

It features original survey data collected from a representative panel of over 5000 companies across the euro area manufacturing and service sectors. For further information For further information click here'.

Data sourced from NTC Research (UK); additional content by WARC staff