EU Economy Brief 34/2017

Numbers of the Week

  • Production in the construction sector fell by -0.2% in the EU and -0.5% in the euro area in June, compared with the previous month. Decreases in construction were recorded in Germany, Belgium, France and the UK. Yet, looking at last year’s numbers in June production has increased by 3.6% in the EU and 3.4% in the euro area. (Eurostat)
  • Economic activity in the euro area gained speed again in August with the purchasing managers’ index climbing up to 55.8 points. The data are based on a survey across the construction, manufacturing and service sectors. Increased activity in the manufacturing sector, especially in Germany, was the main driver. (IHS Markit, FT)
  • Business confidence in France has reached its highest level since 2011 with 106 points in August. For almost two years the index has been above its long-term trend average of 100 and climbing steadily. The data are based on a survey of business managers. (INSEE)
  • Quarterly GDP growth for the UK was confirmed at 0.3% for Q2 2017. Government spending and public investment were the main contributors to growth, while household spending and private investment slowed down. (ONS)

Chart of the Week­

The euro continues its rise against other major currencies of its main trading partners

  • Since April 2017 the euro has appreciated by 5% in value, when measured against a basket of currencies of its main trading partners. The stronger euro has contributed to a fall in the euro area’s current account surplus.
  • Against the British pound the euro now stands at an 8-year high. With 1.0 euro equal to 0.92 British pounds the two currencies are getting closer to parity.
  • Yet, it has to be noted that the euro has been relatively weak from 2008 until 2016: After the crisis it lost about one fifth in value against the currencies of its main trading partners.
  • The nominal effective exchange rate of the euro shows the value of the currency relative to a basket of currencies of the 19 most important trading partners outside the euro area. They are: China, United States, United Kingdom, Japan, Switzerland, Poland, Czech Republic, Sweden, South Korea, Hungary, Denmark, Romania, Canada, Hong Kong, Singapore, Norway, Australia, Croatia and Bulgaria (listed by weight).

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