Not since October 2000 have employment and output prices risen so fast within the Eurozone - the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) within the twelve nation euro currency area.

The key findings for the Royal Bank of Scotland/NTC Eurozone Composite Indices for January 2006 are ...

  • Output
    Fuelled by increasing backlogs of work, the output of the combined manufacturing and service sectors, edged up from 56.4 in December to 56.6 in January. The latest reading indicates an acceleration of the rate of growth of private sector output for the fifth successive month.

  • New Business
    This signalled the strongest increase in demand for goods and services for two years, with similar rates of increase recorded in the services and manufacturing sectors. Backlogs of uncompleted work rose at the fastest rate recorded since the series began in November 2002, up for the fifth successive month.

  • Employment
    The index rose for the fifth month running. However, the rate of job creation remained subdued and slipped slightly from December's four-and-a-half year high, as continued firm growth in the service sector contrasted with a marginal decline of the manufacturing workforce.

  • Average prices
    Average prices for goods and services rose for the fifth month running, with the rate of increase at an 11-month peak. Output prices rose in both services and manufacturing, but in both sectors the rates of increase remained only weak, largely reflecting strong competitive pressures.
The indices are currently based on data from panels for Germany, Italy, France, Spain and Ireland. Combined, these countries account for an estimated 83% of Eurozone private sector services output. Thus, although coverage is incomplete, the proportion of total activity covered by the survey means that the data should be regarded as a good indicator of overall economic conditions.

The service sector survey data cover around 2,000 companies, with the contribution from each company weighted according to company size to produce individual country indices. The data for each country are then combined using weights determined by national contribution of services output to total Eurozone services output. For further information on the Eurozone indices click here.

Data sourced from NTC Research; additional content by WARC staff