Daily Management Review

As Key Index Edges Up, Euro-Area Economy Shrugs Off Brexit


08/23/2016




As Key Index Edges Up, Euro-Area Economy Shrugs Off Brexit
With growth showing little sign of being curtailed by fallout from the U.K.’s Brexit vote, the euro-area economy maintained its momentum in August.
 
For a second month in July, a composite Purchasing Managers Index for the 19-nation region rose to 53.3 from 53.2. That reading marks the best in seven months and that’s above the 50 level that divides expansion from contraction.
 
“The PMIs suggest that growth still is more robust in the service sector than in manufacturing – a phenomenon that can be observed in many regions and that goes hand in hand with slow growth of global goods trade,” said Holger Sandte, chief European analyst at Nordea Markets in Copenhagen.
 
While noting that inflation remains muted and services confidence dipped this month IHS Markit said its report shows the euro-zone economy remains on a “steady growth path.” Similar to the average of the first half of the year, it estimates GDP growth of about 0.3 percent this quarter.
 
Chris Williamson, chief economist at Markit in London said that there are “no signs of the recovery being derailed by Brexit uncertainty.”
 
“The weakness of the overall pace of expansion and disappointing trends in hiring, order books, business optimism and prices all suggest that policy makers will keep the door open,” he said while adding that the PMI will “add to the belief” that the European Central Bank won’t see a need for immediate further stimulus.
 
IHS Markit said earlier that in August, Germany’s composite PMI dropped to 54.4 in the current month from 55.3 in July. The composite measure in France was pushed to a 10-month high of 51.6 in August from 50.1 in July by an improvement in the services sector, it said.
 
The data came as a boost for many European leaders including German Chancellor Angela Merkel who had earlier said that the European Union needs to show it can prosper without the U.K.
 
“We respect Britain’s decision but naturally also want to make it clear that the other 27 are working for a prosperous, safe Europe. We need results,” said Merkel during a meeting with President Francois Hollande and Italian Prime Minister Matteo Renzi.
 
Continental leaders are trying to move toward an initial vision of the post-Brexit bloc for a summit of all 28 EU countries except Britain with future relations between the EU and the U.K. in limbo for now.
 
The fact that U.K. access to the EU’s free movement of goods, workers, capital and services won’t automatically carry over into any new needs to be recognized by Prime Minister Theresa May’s government, Michael Fuchs, deputy parliamentary leader of Merkel’s party bloc, had said.
 
“If you’re member of a club you have certain benefits, but if you’re out, you will not have the benefits anymore,” Fuchs said in television interview recently.
 
Competing visions between countries that want to put the EU’s institutions -- and their bureaucrats in Brussels -- on a shorter leash and those who view closer European integration as part of the solution has been laid bare by Brexit.
 
(Source:www.bloomberg.com)
 
 






Science & Technology

Fast Company: Apple isn't the most innovative anymore

U.S. Space Program Could Be Delayed Due To SpaceX, Boeing Design Risks: Reuters

What trends will be affecting the health sector in the coming years?

Deloitte identifies main cyber threats for power industry

Zenuity To Take Self Driving Car Road Test In Sweden With Permission

Researchers: Half of Facebook users is fake

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

World Politics

World & Politics

AirHelp expects up to 33 th of cancellations and flight delays per day all over the world in 2019

Far-right and Catalonia: New elections in Spain

Trump is losing rating because of shutdown

Hanoi, Vietnam Chosen As Place For 2nd Summit Between Trump And Kim Jong-Un

US, China to hold new negotiations in Beijing

Human Rights Not To Be Dissociated From Stability, Macron Tells Sisi

Brexit Hijack Is Not The Parliament’s Right

Macedonia ignites political crisis in Greece