Europe business activity up in October
Friday October 23 2009
Europe’s manufacturing and services industries expanded at the fastest pace in 22 months in October as evidence mounted that the global economy is pulling out of the recession.
A composite index of both industries in the euro-area economy rose to 53 from 51.1 in September, London-based Markit Economics said today.
That was the highest since December 2007 and above the 51.6 that economists had projected, according to the median of 13 estimates in a Bloomberg News survey. A reading above 50 indicates expansion.
European companies are stepping up output to meet reviving orders after governments around the world spent $2 trillion in stimulus measures to fight the worst recession in at least six decades.
The International Monetary Fund (IMF) said on October 1 that the global economy will expand at a faster pace than previously expected in 2010. Still, the euro’s ascent against the dollar may curb the recovery in Europe.
“The second half of the year will be relatively strong,” said Juergen Michels, chief euro-area economist at Citigroup in London. “Looking ahead, there are a lot of reasons for momentum to weaken partly because of a stonger euro.”
The world economy will shrink 1.1pc this year, less than the 1.4pc projected in July, the IMF forecast.
In 2010, the economy may expand 3.1pc instead of a previously projected 2.5pc, the fund said. In the euro region, the economy probably returned to growth in the third quarter, the European Commission forecast last month.
Global recovery
Adding to signs of global recovery, German business sentiment improved to a 13-month high in October, the Ifo institute in Munich said today, citing a survey of 7,000 executives.
Confidence in the world economy rose for a third straight month in October, a Bloomberg survey of users on six continents showed earlier this month.
In the US, industrial output increased more than expected in September and China’s manufacturing expanded at the fastest pace in 17 months.
Wolfsburg, the biggest overseas carmaker in China, sold 150,000 cars last month, a monthly record, as sales for the first nine months surged 37pc. Volkswagen is investing €4bn to expand capacity in China through 2011.
“China is the steam engine of the world economy,” Volkswagen sales chief Detlef Wittig said in a September 25 interview in Frankfurt. “The lust for mobility there seems almost bottomless. We’re very well positioned there and will keep investing to secure our share of the market.”
- Simone Meier
© Bloomberg
