EU escaped recession Q1 2012 thanks to Germany
Confidence dips on resurfacing concerns
Domestic demand in the doldrums
Manufacturing sentiment under pressure, so far output rather firm
Highly uncertain outlook, sentiment remains key
Bold action from EU policymakers required as time is running out
EUROFER Forecast July 2012 for EU
| 2010 | 2011 | 2012 (e) | 2013 (f) | |
| GDP | 2.1% | 1.5% | -0.2% | 1.1% |
| Private consumption | 0.8% | 0.1% | -0.4% | 0.5% |
| Government consumption | 0.8% | -0.1% | -0.1% | -0.3% |
| Investment | 0.7% | 1.3% | -1.9% | 1.7% |
| Investment in mechanical equipment | 4.9% | 3.3% | -2% | 1.8% |
| Investment in construction | -3.6% | -0.9% | -2.8% | 0.1% |
| Exports | 11% | 6.1% | 2.5% | 4.5% |
| Imports | 9.8% | 3.4% | 0.7% | 3.6% |
| Unemployment rate | 9.6% | 9.5% | 10.2% | 10.4% |
| Inflation | 1.9% | 3.1% | 2.4% | 1.8% |
| Industrial production | 7.5% | 3.3% | -1.3% | 1.9% |
(e) - Estimate
(f) - Forecast
In the 1st quarter of 2012, GDP in the EU stabilized at the level of the preceding quarter. Robust economic growth in Germany, which amounted to 0.5% QoQ, prevented the EU from sliding into a recession. Also the Nordic and Baltic member states, Poland and Slovakia registered rather strong growth in Q1 2012. The majority of large EU economies however posted weak or negative growth; Spain and the UK joined Italy and slid into a recession.
Despite GDP outperforming earlier expectations of a contraction, economic conditions from the start of the year are to be referred to as recessionary.
Available data on unemployment, investment, industrial activity and retail sales signal that in most EU countries economic momentum continued to slow down in the first months of 2012. Particularly domestic demand remained sluggish. Private consumption stabilized at the level of the previous quarter and government expenditure even posted a small QoQ increase, but gross fixed capital formation weakened significantly, falling 0.9% compared with the 4th quarter of 2011.
Temporary factors such as a rise in construction output in several EU countries probably contributed to actual first quarter performance exceeding expectations. In the Northern European countries, also exports and private consumption contributed to growth.
Source - EUROFER
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