Home
 American AgCredit
Weather |  Futures |  Market News |  Headline News |  DTN Ag Headlines |  AgBizDir.com |  Portfolio |  Cattle News |  Dairy News |  Grain |  Livestock |  US Ag News 
 
 
Printable Page Headline News   Return to Menu - Page 1 2 3 5 6 7 8 13
 
 
Europe Recovery Likely Strengthening   04/23 06:14

   A closely-watched survey has found business activity across the 18-country 
eurozone running at a three-year high, in perhaps the clearest sign yet that 
the economic recovery is gaining momentum.

   FRANKFURT, Germany (AP) -- A closely-watched survey has found business 
activity across the 18-country eurozone running at a three-year high, in 
perhaps the clearest sign yet that the economic recovery is gaining momentum.

   Analysts say Wednesday's positive data could take some of the pressure off 
the European Central Bank to take further steps to stimulate the economy at its 
next monthly policy meeting on May 8 despite stubbornly low inflation across 
the 18-country single currency zone.

   The Markit survey of purchasing managers --- a closely watched gauge of 
business activity --- climbed to 54.0 in April from 53.1 in March. That's the 
highest reading since May, 2011. Anything over 50 indicates expansion.

   Analysts said Wednesday's figures, which cover both services and 
manufacturing companies, showed that the modest recovery in the eurozone was 
exhibiting increasing strength.

   "Growth is increasingly reaching proper recovery speed, thanks largely to 
rebounding domestic demand," economist Christian Schulz at Berenberg Bank said.

   Schulz said the strong rise for the services part of the survey, to 53.1 
from 52.2 in March, gave a better reading for demand from businesses and 
consumers at home. That's as opposed to exporters whose business depends more 
on the global economy.

   Alarmingly low inflation of only 0.5 percent and high unemployment have 
raised fears the rebound was too weak to sustain itself and would require more 
stimulus from the European Central Bank. The eurozone grew by a quarterly rate 
of 0.2 percent in the fourth quarter of last year. The ECB expects the economy 
will grow by only 1.0 percent this year.

   Still, unemployment remains painfully high at 11.9 for the eurozone as a 
whole.

   The ECB, in charge of monetary policy for the euro member countries, faces 
pressure to cut interest rates or take other measures to increase inflation 
toward its goal of just under 2 percent.

   Low inflation is a sign of continuing weak demand, and can make it harder 
for indebted countries, companies and consumers to pay down debt. Some 
economists fear that if further measures are not taken, the eurozone could slip 
into outright deflation, a crippling downward price spiral that kills off 
growth and jobs. Despite the recent falls in inflation, the ECB says deflation 
is unlikely.

   Wednesday's figures suggest inflation will gradually rise, Schulz said, but 
some analysts still say the ECB may yet cut its benchmark interest rate or take 
other action in the coming months.


(KA)


 
 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN