'Sluggish' Growth in Eurozone Private Sector Economy

06 June 2005

Sluggish growth in the Eurozone economy during May led to an easing of price pressures, according to the latest monthly Report on the Eurozone from NTC Research.

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

A key indicator of the zone's economic health is the Eurozone Composite Output Index, which rose marginally from 51.8 in April to 52.1 in May, registering an expansion of private sector output for the twenty-second consecutive month, with a slight improvement in the rate of growth.

However, the pace of expansion remained well down on that seen before the slowdown of last autumn. Other key findings for May 2005 are …

  • New Business
    The Eurozone Composite New Business Index registered 51.0 in May, down from 51.2 in April, signaling only a subdued rise in demand for goods and services and a rate of increase down slightly on a month ago. New business has risen only modestly in each of the past three months. Upward input cost pressures eased markedly in May.

  • Input Prices
    The Prices Index fell to a nineteen-month low of 53.8, well below the recent peak of 66.9 recorded last October. Slower growth of costs in part reflected the easing in euro-denominated oil prices, but also weaker wage and salary pressures as well as reduced prices for a wide and increasing variety of raw materials.

  • Employment
    The Employment Index recorded 49.4 in May, down from 49.6 in April, to indicate a marginal decline in private sector staffing levels for the second month in a row. .
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.

For further information on Eurozone data click here.

Data sourced from NTC Research; additional content by WARC staff