Eurozone Q3 Growth Dips But Remains Robust

05 October 2006

LONDON: Private sector growth in the Eurozone - comprising the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) within the twelve nation euro currency area - dipped only slightly in September, ending a strong third quarter.

The latest report covers both manufacturing and services sectors and was compiled for the Royal Bank of Scotland by NTC Economics.

Key findings for September 2006:

  • Output
    The Composite Output Index signalled an increase in private sector output for the thirty-eighth consecutive month in September.

  • New Business
    Incoming new business increased at an identical pace to that seen in August. The data suggest that inflows of new work have eased since the soccer World Cup-driven six-year peak of June, but nonetheless remain robust and strong by historical standards of the survey.

  • Work Backlogs
    These rose for the thirteenth consecutive month, suggesting the existence of further capacity constraints. The rate of increase slowed marginally compared with August, down for the second month running, but the latest rise was still the fifth-strongest in the survey's history.

    This rose for the thirteenth month in a row in September, linked to the need to boost capacity in line with the sustained growth of new business and rising backlogs of work. The rate of job creation also picked up marginally on August's six-month low, reflecting improved growth rates both in manufacturing and services.

  • Input Prices
    A further steep rise in input prices was recorded in September, attributable in particular to rising prices for many raw materials in manufacturing. However, the rate of increase eased again from July's 21-month high, dropping to a five-month low, largely as a result of lower oil prices.

  • Prices
    Average prices charged for goods and services rose for the thirteenth consecutive month, with the rate of increase picking up slightly on that seen in August. As a result, the average rate of increase in Q3 has equalled that seen in Q2.
The report features original survey data collected from a representative panel of over 5000 companies across the euro area manufacturing and service sectors.

For further information on Eurozone Composite Output Index click here.

Data sourced from NTC Economics; additional content by WARC staff