Germany Leads August Growth in Eurozone Private Sector Economy

07 September 2007

HENLEY-ON-THAMES, UK: Growth in the Eurozone - the eight largest European economies within the twelve nation euro currency area (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) - continued through August.

Although fractionally down from the final July figure of 57.5, August's reading of 57.4 signalled the continued strong expansion of the euro area private sector economy moving through Q3.

Services again posted the sharper growth of the two sectors, despite expansion slipping slightly from the historically high readings seen in the previous two months. Growth of manufacturing production, meanwhile, steadied at a pace only slightly above July's 18-month low.

Other key findings for the headline Eurozone Composite Output Index in August were …

  • Combined Output
    Among the big-four euro countries, Germany recorded by far the strongest pace of expansion, with growth accelerating strongly to a seven-month high. Spain posted the weakest rate of expansion for the fourth month running, hitting a 21-month low, and growth also slipped in Italy and France.

  • New Business
    The strong expansion of new business moderated slightly in August from July's twelve-month high. Growth of new business slowed in both manufacturing and service sectors, dropping to 21-month and three-month lows respectively. The service sector recorded the stronger pace of expansion for the sixth month in succession.

  • Employment
    Growth dipped slightly from July's six-and-a-half year high, but remained slightly up on the average for H1 2007. Services again posted the stronger pace of growth.

  • Input price inflation
    This remained sharp in August, despite easing to the lowest so far seen in 2007. Manufacturing continued to record much the sharper rate of input price inflation, despite the pace of increase dropping to its lowest since December 2005. Input cost inflation also slowed (albeit only modestly) in services, to register a three-month low.

  • Output price inflation
    The pace of inflation of output prices slowed slightly in August, but remained firm. Rates of inflation were identical in the manufacturing and service sectors.
The Eurozone report features original survey data collected from a representative panel of over 5000 companies across the euro area manufacturing and service sectors.

Questions are asked about real events and are not opinion based.

The data are based on the results of surveys carried out in Germany, France, Spain, Italy, Austria, Ireland, Greece and the Netherlands (plus the UK, Poland and the Czech Republic for the EU data), covering over 6,000 manufacturing and services companies.

These countries together account for an estimated 92% of total Eurozone gross domestic product.

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