29 NOVEMBER 2011

Economic Confidence in the Euro area fell one point to 93.7 and equally in the EU 27 to 92.8 points according to European Commission data shaken by the Euro area's unresolved debt crisis involving the region's very future : Greece's surprise announcement of a referendum on exiting the single currency zone, Italy's debt level, markets volatility and warnings over future potential sovereign downgrades hammered down moral in Europe. Industrial investments in value and in 2012 are also projected to turn negative.
 
France's index this month fell nearly three points to 93.2 as a second austerity plan including a VAT rise was announced by government simultaneously with slower than expected growth for next year. Spain's general elections left economic confidence mostly unchanged as the index rose under one point to 91, and equally in Italy, following the new Primer's appointment.  However, in each country, industrial and consumer gauges, which are integral part of economic confidence, rose significantly. In the UK, a non euro area member state, confidence fell under one point to 88.9 despite the country's weak economic data on top of neighboring export markets dire straight. 

By contrast, east European countries respective economic confidence indices overwhelmingly rose, led by Latvia and Lithuania, up on average four points each, while Poland‘s index stayed more prudent and climbed nearly one point to 93.5. In Romania, economic confidence picked up and grew nearly two points to 92.7. 

Regained industrial confidence accounted for higher moral in each country, up respectively nearly three points and five points. The Euro area's index one point dip to -7.3 reflected by contrast a lack of confidence due to the region's debt context. France's index contracted two points to -10.2, while Germany's stagnated at -0.7% for the second consecutive month. Spain's index deteriorated and fell three points to -16.9. Inversely, Italy's gauge climbed under one point to -9.7 as new measures voted by Parliament answered calls to restrain public debt significantly. 

Nordic states performed unevenly, especially Sweden where the index plunged five points to -11.3 due to lower production expectations down to 0.6 points from 13 the previous month. The Euro area's index mirrored a similar mood by turning negative to -0.7 points. France's index shed over five points and dropped to -1.6  as a downgrade warning arched over already feeble economic prospects. Germany's by contrast turned positive to 1.1 points and in Italy to 1.7 points. Spain's gauge worsened and fell three points to -7.
Poland and Romania stayed upbeat with their respective indices up three points to 5.7 and 11 points to 14.1.

Order books in the Euro area confirmed an overall downbeat mood as the index fell one point to -14. In the EU 27, the index dipped three points to -15.6. France's index nevertheless grew two points to -12.9 as two major sectors, the food and agriculture sector as well as transport equipment, project stronger orders according to national statistics. In Germany, the new orders index recorded a low 2.2 points, while Spain's dived over seven points to -34.5. Italy's index declined over two points to -30. The UK's index recorded the hardest fall among the EU 27 major heavy weights, down 11 points to -16.8
 
Stocks of finished products nevertheless revealed resilience in the Euro area, up one point to 7.1 and equally in the EU 27 to similar levels. France's index rose one and half point to 16 so as to meet demand due to fierce competition in a feeble economic context. Germany's index performed equally and grew to 5.3 points as well as in Italy and in Spain.  In the UK, the index slowed down to 17.3 , a near four-point decline compared with the previous two months sustained stock replenishing momentum.

The Euro area's production trend in recent months index fourth consecutive decline and abrupt monthly five points dip to -7.8 confirmed the economic halt. The EU 27 first drop in negative territory to -3.2 points (from 0.4 points) fared equally. The single currency's  export order books index also recorded its seventh uninterrupted fall to this month -15.8 points with France, Germany, and Spain recording on average each a three-point drop.  In the UK, the index plummeted over 20 points to -25.6. In this context, employment expectations shrank further and stayed negative for the third consecutive month in each the Euro area and in the EU 27. Selling price expectations nevertheless rose due to commodity prices swings.  In the Euro area, the index rose nearly one point to 5.9 and in the EU 27 to 6.2 points. France's index jumped nearly five points to 9.3 and in Germany stayed sustained at 8.4 points. Italy's index moved down one point to 5.2 while Spain's decreased a successive -5.9 points to beef up its competitive edge. In the UK, the price index performed equally to Italy's and despite Sterling's inflationary impact on import prices.