Economic progress has been slow going across much of the world since the global downturn, but there may be positive news in the European market on the way.
In December, the Leading Economic Index for Europe rose to 109.9, which was 0.6 percent improved from November, according to a report from The Conference Board. The figure was notably higher than the baseline of 100, which was recorded in 2004, while it was also 0.5 percent improved from October’s level of 0.5 percent.
While the projection showed a potential gain in the future, the current situation was not as positive. The report showed that the Coincident Economic Index fell to 101.1 in December, which was 0.1 percent lower than the previous month. This reading had an uptick of 0.3 percent in November, but fell 0.1 percent in October.
“The LEI increased for the seventh consecutive month, signaling a continued brightening of the outlook for the Euro Area economy in early 2014,” said Bert Colijn, economist for Europe at The Conference Board. “Sentiment among businesses and consumers keeps improving as confidence in the recovery is picking up. However, even though the first half of 2014 looks promising, the lack of strong investment, high unemployment and low wage growth implies that the rate of economic growth will remain modest.”
Inflation stagnates in Europe
While the economic situation may have some improvement in the coming months, the level of inflation is not doing the same. According to a separate report from The Conference Board, Europe had no change in inflation overall in December compared with the same month in 2012.
“At the end of 2013, inflation in half the countries and areas compared dipped to 1.0 percent or lower, reflecting the large economic slack remaining across various economies,” said Elizabeth Crofoot, senior economist with the International Labor Comparisons program at The Conference Board. “Despite greater optimism for economic growth in Europe heading into 2014, inflation in the Euro Area edged down again in December. In the rest of Europe, Denmark, Sweden, and Switzerland also continue to flirt with deflationary risk.”
Austria experienced an inflation gain between 1.5 percent and 2 percent, the report added. Belgium had a gain between 0.9 percent and 12. percent. However, Germany had an inflation drop to 1.2 percent in December from November’s 1.6 percent.