Eurozone Private Sector Employment Growth Hits Eleven-Month High

07 June 2007

HENLEY-ON-THAMES, UK: The private sector economy in the Eurozone - the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) within the twelve nation euro currency area - continued to expand at a strong rate in May.

Between them these eight countries account for an estimated 92% of business activity within the zone

At 56.8, the Royal Bank of Scotland's Eurozone Composite Output Index remained well above the no-change mark of 50.0 and also up on the long-run series average of 54.5, as both manufacturing and service sectors continued to register impressive growth rates.

Key data from the May 2007 report follows . . .

  • New Business
    Incoming new orders were up for the forty-sixth consecutive month in May, with the pace of growth accelerating slightly to a rate in line with the average recorded for Q1. The modest pick up in growth of total new business was driven by stronger expansion of new work to service sector firms, with growth strengthening for the third month running to a four-month high.

  • Work Backlogs
    These rose for the twenty-first successive month, with the pace of growth accelerating slightly for the fourth consecutive month to a robust rate that was the strongest since last November.

  • Employment
    This increased for the twenty-first month running and at the sharpest rate since last June, as firms in both manufacturing and services sought to further boost capacity in response to the sustained strong growth of incoming and outstanding business. The buoyant rate of growth of private sector staffing levels was the second sharpest for six-and-a-half years and primarily reflected an acceleration in growth of services employment to the strongest in eleven months.

  • Inflation
    Input price inflation remained marked in May, but slowed on April to the weakest so far this year.

  • Output Prices
    These increased for the twenty-first successive month. The pace of inflation remained robust and high by the historical standards of the survey, but slowed for the second month running to the weakest since last November.
The report, produced for the RBS by NTC Research, features original survey data collected from a representative panel of over 5000 companies in the manufacturing and service sectors across the euro area.

For further information on the Eurozone reports click here.

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