Eurozone Growth in November Weakest in 27 Months

11 December 2007

HENLEY-ON-THAMES, UK: The Eurozone experienced its weakest rate of expansion since September 2005, according to the latest Royal Bank of Scotland / NTC Eurozone Composite Output Index.

The zone comprises the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) within the twelve nation euro currency area.

The easing reflects a slowdown in service sector growth to a 27-month low, which was only partly offset by a bounce-back in growth in the manufacturing sector from October's 26-month low.

The report's key findings for November are:

  • New Business
    The New Business Index was down on October and growth in November was the second-weakest in the past 27 months. Growth of new business slowed to a two-year low in services but picked up slightly to a three-month high in manufacturing.

  • Employment
    Employment continued to rise at a robust pace, though the rate of increase slipped to a nine-month low. The rate of job creation fell in services but rose in manufacturing, yet the former continued to register the stronger rate of increase.

  • Input Prices
    Latest input prices data signalled the strongest monthly increase since January. Growth of input costs hit a seven-year high in services and picked up to a three-month high in manufacturing, led by rising fuel prices in both sectors.

  • Price Inflation
    Output price inflation was the fastest in three months in November. However, the rate remained well below that seen at the start of the year as firms often reported weak pricing power. Output prices rose at faster rates in both manufacturing and services.
The report features original survey data collected from a representative panel of over 5000 companies across the euro area manufacturing and service sectors.

The manufacturing survey data cover around 3,000 companies, with the contribution from each company weighted according to company size so as to produce individual country indices.

The data for each country are then combined using weights determined by national contribution of manufacturing output to total Eurozone manufacturing output.

For further information on the reports click here.

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