Eurozone economy stuttering along as stimulus decision looms

LONDON -- The eurozone economy is stuttering along.

That's the conclusion from economic reports Thursday that are likely to cement expectations that the European Central Bank will bolster its stimulus efforts in a week's time.

See Full Article

Financial information company Markit said its main gauge of business activity across the 19-country single currency bloc showed growth faltering for the second straight month. The so-called purchasing managers' index slipped to 53.0 points in February from 53.6 the month before.

Though the February rate was higher than the 52.7 initial estimate and remains above the 50 level that marks the threshold between expansion and contraction, it points to muted growth, particularly in France, the eurozone's second-largest economy. Markit estimates growth in the first quarter of this year could ease from the already "meagre" quarterly rate of 0.3 per cent at the end of 2015.

"The slowdown in growth of business activity, accompanied by a similar easing in the pace of job creation and the steepest fall in prices charged for a year, suggest that the region's recovery is losing momentum," Williamson said.

"The broad-based disappointment ups the odds of the ECB acting aggressively to avoid another downturn," he added.

Separate figures from the European Union's statistics agency, Eurostat, showed retail sales in the region grew by a monthly rate of 0.4 per cent in January. It's a modest uptick and provides further evidence that the region's consumers won't be driving economic activity enough to quickly reduce the region's unemployment rate, which is still high at 10.3 per cent despite consistent falls over the past two years.

Neither the survey from Markit nor the Eurostat data are likely to ease concerns much about too-low inflation, which is ostensibly the ECB's main concern. Figures this week showed the eurozone's annual inflation rate fell below zero in February, to negative 0.2 per cent, way short of the ECB's target of just below 2 per cent.

ECB President Mario Draghi has consistently hinted at further measures over the past few weeks and the markets now expect some bold action at the central bank's meeting on March 10. Measures being touted include a further cut into negative territory of the rate the ECB pays banks on their deposits at the central bank. It currently stands at minus 0.3 per cent, meaning banks have to pay to keep money at the ECB.

By keeping interest rates low and pumping money into the economy via its bond-buying program worth over a trillion euros, the ECB is hoping to generate enough economic activity to get prices rising.

The great concern is that the clouds over the eurozone, as well as over the global economy as a whole, have darkened over the past couple of months, largely because of unease over the economic slowdown in China.



Advertisements

Latest Economic News

  • B.C. premier and jobs minister sued by fired LNG advocate claiming $5M

    Economic CTV News
    VANCOUVER -- British Columbia's fired liquefied natural gas advocate is suing Premier John Horgan, the province's jobs minister and a New Democrat MP in a lawsuit claiming $5 million in damages. Gordon Wilson alleges in a statement of claim filed in B.C. Source
  • Millennials in Atlantic Canada most optimistic about owning homes

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • Can millennials afford to buy a home? It depends where they live

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • $500K hardship fund for former Sears Canada employees approved by judge

    Economic CBC News
    A judge has approved a hardship fund for former Sears Canada employees that will come from a pool of money set aside to pay bonuses for key employees. The $500,000 fund will help former employees facing difficulty who would have otherwise been eligible for severance payments when they lost their jobs at the retailer. Source
  • Elevated testosterone linked to 'reckless' financial trading, study finds

    Economic CBC News
    It's no secret financial traders have always been predominately male. So, when a group of researchers with the Ivey Business School at Western University in London, Ont., set out to at look at the role of testosterone on the markets, it wasn't a far-flung idea. Source
  • Brazil to ask for WTO panel to settle dispute over Bombardier subsidies

    Economic CTV News
    MONTREAL -- Brazil says it will ask the World Trade Organization to establish a dispute settlement panel after consultations with Canada failed to resolve its complaint about government subsidies to aircraft manufacturer Bombardier. The South American country said it will ask the WTO to examine more than 20 subsidy programs granted to the Montreal-based company for the development of its CSeries aircraft. Source
  • Bombardier employee in Swedish unit charged with bribery

    Economic CBC News
    A Russian employee in the Swedish branch of Canadian plane and train maker Bombardier was charged Friday with aggravated bribery and faces up to six years in jail and deportation if found guilty. Swedish prosecutor Thomas Forsberg alleges Evgeny Pavlov bribed a public servant in Azerbaijan to win a $340-million contract for a new signalling system. Source
  • Bombardier says Russian worker charged with bribery doesn't reflect its values

    Economic CTV News
    MONTREAL -- Bombardier says the filing of formal criminal charges in Sweden on Friday against a railway employee doesn't reflect its values. "We take these allegations very seriously as they assert conduct that does not reflect our values or the high standards we set for ourselves, our employees and our partners," the Montreal-based company (TSX:BBD.B) said in a statement. Source
  • Shipping firm blames fee hike on federal measures to protect right whales

    Economic CTV News
    ST. JOHN'S, N.L. - A Newfoundland shipping firm is raising its fees, blaming higher costs because of federal measures taken to protect North Atlantic right whales after a series of deaths. Oceanex Inc. says the four-per-cent "temporary marine protection surcharge" on service between Montreal and St. Source
  • TMX working with Canadian regulators on how to deal with U.S.-linked pot stocks

    Economic CBC News
    TMX Group Ltd. is seeking guidance from Canadian securities regulators as it weighs how to deal with marijuana companies listed in Canada with interests in the United States where the business remains federally illegal. "This is a complex matter which touches multiple aspects across our capital market system, and as such requires close examination and careful consideration," Toronto-based TMX Group said in a release Thursday. Source