HENLEY-ON-THAMES, UK: Employment 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) - rose to a six and a half year high in July, reports the Royal Bank of Scotland's Eurozone Composite Output Index.
However, the overall reading for July fell marginally from 57.8 to 57.5, while manufacturing output growth slowed to an 18-month low, continuing the general easing trend seen over the past year. In the services sector the output trend held steady.
Among the 'big four' euro-currency nations (Germany, France, Italy and Spain) the former recorded the strongest gain, as has been the case for much of the year, with growth easing only slightly from June's five-month high. Spain saw the slowest rate of expansion for the third month running.
Key findings for July 2007:
- New business
This rose at the fastest pace for twelve months, driven by demand for services rising at the sharpest rate for seven years. Services saw a sharper rise than manufacturers, while backlogs rose in all the 'big-four' countries.
Growth accelerated to the strongest for six-and-a-half years, led by services. Manufacturing growth slowed slightly in but stayed close to June's six-and-a-half year high. Meanwhile job creation in services was the second-strongest in the past seven years.
- Input price inflation
This increased to a six-month peak, driven by higher oil prices plus further signs of higher wage rates. Input prices rose at the fastest rate for nine months in manufacturing while growth hit a six-month peak in services, with costs rising at rates well above the survey's long-run averages in both sectors.
- Output prices
Firms again cited the need to pass higher costs on to customers, causing output prices to continue to rise at a solid pace in July. However, the rate of increase dipped below the average seen in the first half of the year.
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Data sourced from NTC Research (UK); additional content by WARC staff