Join        Login             Stock Quote

As The Eurozone Tries To Turn The Corner, One Member Nation Continues To Lag

 February 04, 2013 12:10 PM

It increasingly looks as though the Eurozone's overall economy is close to bottoming out (as discussed here). This may be a transient effect but it's real nevertheless. The PMI numbers are still in a contraction mode, but the trend is no longer downward.
Source: Markit
Markit (Chris Williamson): - The Eurozone economic picture continues to brighten, with the final reading of the manufacturing PMI for January coming in ahead of the earlier flash estimate. The survey continues to signal an overall deterioration of business conditions, but rose to an 11-month high to suggest that the industrial sector is close to stabilising after contracting throughout much of last year.

[Related -A Shake-Up Is Coming In Big Pharma - Here's How To Profit]

The improvement was led by Germany, which saw the strongest gain in output of all eurozone states, but rising exports are also helping to revive the manufacturing sectors of other countries, most notably Spain and Italy.

There is however a major exception to this trend. France's economic conditions continue to deteriorate.
Markit (Jack Kennedy): - The deterioration in French manufacturing sector business conditions continued in January. The fact that new orders fell at the sharpest rate for nearly four years is a particularly concerning development and suggests further steep falls in output are likely as we progress throughout the first quarter. Confidence seems to have evaporated in the face of an increasingly uncertain economic environment, leading manufacturers to make sharper cuts to employment, purchasing and input stocks in the latest survey period.
In fact the trends in composite PMI for France vs. the rest of the Eurozone have diverged sharply.
Source: JPMorgan

[Related -The Missing Lowflation Revolution]

Poor competitiveness continues to be one of the key issues (as discussed here).

JPMorgan: - A longstanding issue for the corporate sector is its lack of competitiveness. This concern is best illustrated by the European Commission survey data, which show that an increasing number of French firms are expressing a lack of competitive advantage in both domestic and foreign markets. The French trade deficit seen since mid-2004 partly corroborates this argument. Competitiveness issues are part of a broader problem facing France: anemic potential growth (the government assumes potential growth at 1.6% oya) and the structural changes that would be required to raise it.
With France's government now representing almost 57% of the nation's overall economic activity, the much needed austerity measures will be a major drag on the GDP growth going forward. And some of the Socialist heavy-handed policies (particularly with respect to taxation) are not helping either.
iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageUS REITs Edged Higher Last Week As Emerging Markets Slumped

Real estate investment trusts (REITs) in the US took the lead in last week’s shortened holiday trading week read on...

article imageA Contrarian Perspective On The Short EuroTtrade

As the euro continues to drift lower, it has become the accepted wisdom that we are headed for parity with read on...

article imageEmerging-Markets Stocks Took The Lead Last Week

Emerging-markets equities enjoyed a solid rise last week among the major asset classes, based on a set of read on...

article imageDoes Your Latest Investment Pass This Test?

On Wednesday, I sounded the alarm about the problems looming for some consumer staples stocks. In short, read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.