‘Europe is beginning to emerge from the doldrums’
An index based on a survey of about 2,000 companies rose to 91 from June’s 20-month low of 90, said Insee, the Paris-based statistics office. The GfK AG market research company’s index of German consumer confidence, compiled in July, gained for a fifth month. A similar index for Britain rose to an eight-month high.
“Europe is beginning to emerge from the doldrums,” said Margaret Poigny, a strategist at Credit Agricole Asset Management in Paris, which oversees €165 billion ($188 billion). She predicts growth in the 12 nations sharing the euro will accelerate to 1.6% next year from 0.6% this year.
Interest rate reductions by the European Central Bank and the Bank of England in the past two months, aimed at fostering an economic recovery, have brought borrowing costs in the region to a half-century low.
France, Germany and Britain make up 58% of the EU’s $10.5 trillion economy.
The euro has slipped 4% since reaching a record $1.1933 on May 27. The currency’s 17% gain in the past year has hurt exporters by making their goods more expensive in the US.
In France, an index measuring total order books rose to a three-month high of minus 29, up from minus 36, Insee said. .
Executives in Germany were more optimistic in July than at any time in the past year, a report by the Munich-based Ifo institute showed on Monday. In Belgium, business confidence rose from a 10-year low in July.
British consumers were less pessimistic in July than at any time in the previous eight months, a survey showed.
Retail sales in Europe’s second-biggest economy grew at the fastest pace in more than a year.
Even with a gain in July, confidence among French manufacturers is near the lowest in almost two years on concern that rising unemployment may sap consumer demand.
France’s unemployment rate rose a three-year high of 9.6% in June, economists expect another government report to show tomorrow.
