A research produced by
Global activity continued to increase modestly throughout Q3, underpinned by better than expected European-level growth, further incremental Eurozone stabilisation, and a pick-up in Chinese growth. Nevertheless, overall global growth remains lacklustre with trade levels failing to accelerate and industrial output remaining at low levels. Indeed, the IMF warned early in Q4 that “A plausible downside scenario. . . is one of continued disappointments everywhere”;
Encouragingly, the Eurozone composite PMI managed to record its fourth successive reading above the 50 neutral mark at 51.9 for October. Positive as this is, it represents a 0.3 point decrease from September, which may indicate the upturn in economic activity that began during the summer is faltering;
The Eurozone Q2 q-o-q rise in GDP of 0.3% looks increasingly like an anomaly and it appears that the Q3 figure is unlikely to surpass this level. German growth remains robust while the rest of the Eurozone continues to struggle. The Q2 French GDP surprise to the upside is likely to prove short-lived (amidst yet another sovereign credit rating downgrade, this time to AA), Italy remains in recession with ongoing political strife, and Spain is straining to maintain its only recently attained positive growth. Disappointingly, the positive growth that is occurring is unlikely to bring down the Eurozone unemployment rate of 12.2% (the highest level on record).
Source : AEW Europe
