Rising Fuel Costs Cause Blip on Eurozone Recovery Curve

06 March 2003

Rising fuel costs in February caused input prices to increase at their fastest pace in two years within the Eurozone – the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, The Netherlands and Spain) within the twelve-nation euro currency zone.

In addition, reports the Reuters Eurozone Composite Purchasing Managers Index from NTC Research, the zone’s overall economic health was further impaired by a steep fall in employment.

Key findings for February 2003:

Overall Growth
The Eurozone Composite PMI report for February shows that the private sector economy of the region recorded no growth in the month, as demand for goods and services rose only very marginally. Meanwhile, input costs rose sharply, driven up primarily by the rising cost of oil. Faced with rising input prices and continued uncertainty regarding both the situation in Iraq and global economic strength, firms across the euro area again chose to cut employment.

The Composite Output Index, an indicator of overall private sector economic growth, fell from a slightly revised 50.4 in January to 50.0 in February, its lowest level for five months. The reading of exactly 50.0 signals a stagnation of output during the month following a brief, four-month period of modest growth.

The Composite Prices Index signalled a marked acceleration in the rate of input cost inflation for the second month running in February. The increase in input prices was the largest since February 2001.

Data sourced from: NTC Research; additional content by WARC staff