LONDON (Reuters) – Euro zone economic performance far exceeded expectations this month – although it still contracted slightly – as a second wave of coronavirus infections and renewed lockdowns had less of an impact than earlier in the year, a survey showed.
Manufacturers reported strong growth, fuelled by rising exports and a booming performance from Germany, but the services industry remained in decline as social distancing restrictions were kept in place.
IHS Markit’s flash composite PMI, seen as a good guide to economic health, soared to 49.8 in December from November’s 45.3, just shy of the 50 mark separating growth from contraction. A Reuters poll had predicted a much shallower rise to 45.8.
“The decent rebound in the composite PMI primarily reflects the partial lifting of restrictions in France and provides some hope that euro zone GDP won’t fall quite as much in Q4 as feared,” said Jessica Hinds at Capital Economics.
“But with tougher measures now being imposed in Germany, the big picture is that services activity in the region will remain weak for a while yet, holding back the economic recovery.”
A Reuters poll earlier this month said the economy would contract 2.6% this quarter. [ECILT/EU]
Germany’s private sector showed resilience as manufacturing picked up steam and services partly recovered, a sister survey showed, while in France activity unexpectedly returned almost to growth this month as some restrictions were eased.
But German Chancellor Angela Merkel and state leaders have agreed to shut most stores and schools from Wednesday until at least Jan. 10 and although France’s lockdown officially ended on Tuesday cafes, restaurants and cultural venues remain closed and some restrictions in place.
Meanwhile in Britain, which has suffered the second highest COVID-19 death toll in Europe, the economy limped back to growth but hospitality businesses struggled and Brexit disruption hit factory supply chains.
Britain faces the added headache that a post-Brexit transition period finishes at the end of the year and Prime Minister Boris Johnson has so far been unable to agree on a future relationship with the European Union.
A Reuters poll earlier this month said the economy would shrink 2.7% this quarter and take at least two years to reach pre-COVID-19 levels. [ECILT/GB]
SHOT IN THE ARM
The PMI covering the bloc’s dominant service industry bounced to 47.3 from 41.7, exceeding all expectations in the Reuters poll that had instead predicted a modest increase to 41.9.
With activity still in decline, and restrictions likely to be in place for some time yet, services firms cut headcount again this month, as they have since Europe began to feel the full brunt of the pandemic in March.
The employment index held below breakeven at 49.4, albeit better than November’s 48.2.
Factories have been less affected by lockdown measures as many remained open, and the flash manufacturing PMI jumped to 55.5 from 53.8, its highest since May 2018 and also above all expectations in a Reuters poll with a median prediction of 53.0.
An index measuring output, that feeds into the composite PMI, rose to 56.6 from 55.3.
Strong demand for manufactured goods meant factories built up a solid backlog of work, with the sub-index rising to 56.2 from 54.3, its highest in nearly three years.
And with hopes vaccines being rolled out will allow some return to normality, optimism was at its highest since April 2018. The composite future output index rose to 63.8 from 60.4.
“The recent positive news on the vaccine front have contributed to an improvement in business expectations,” said Nicola Nobile at Oxford Economics.
“But while we certainly welcome this news, the short term outlook is still clouded with risks, in particular in relation to the extension of the containment measures.”
(Reporting by Jonathan Cable; Editing by Catherine Evans)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
