Euro Area Trade In Balance

The first estimate from Eurostat for euro area trade with the rest of the world in May 2011 was in balance. There was a deficit of 4.9bn euros for the same period last year. In April 2011 the deficit was 4.8bn euros. The EU27 is estimated to have had a deficit of 13.2bn euros in May 2011 compared with -16bn euros in May 2010. The April balance was a 16.4bn euros deficit in 2011 compared with 12bn euros deficit in 2010. The euro area's main trading partners between January and April 2011 in euro terms were the United States, United Kingdom and China. Russia saw a 33% growth in imports from EU17. The main trading partners with the EU27 were the United States and China.

5.3% Increase In European Manufacturing Orders

New manufacturing orders increased by 5.3% in August 2010 after a 1.8% fall in July. If the more volatile heavy transport sector including ships, railways and aerospace are left out the increase was still 4.1%. It was the same in the EU27. Total new industrial orders increased by 3.6% and excluding heavy transport equipment the increase was 3.3%. Capital goods were the most significant driver in both areas.

Euro External Deficit Cut To 37.1bn

The EU27 had an external current account deficit of 37.1bn euro in Q2 2010 from 42.1bn euro in Q2 2009 and 31.8bn euro in Q1 2010. The trade in service balance was 19.3bn euro and the balance was -1.2% of GDP. In the euro area (EA16) the deficit was 23.1bn euro the balance of trade in services was 11.9bn euro and the balance as a percentage of GDP was 1%.

Euro Inflation To 1.8%

Inflation in the euro area increased to 1.8% in September from 1.6% in August. Last year in was -0.3% and monthly inflation for September was 0.2%. EU annual inflation was 2.2% in September from 2% in August.

Euro Services Growth Slows Deficit Growth

The external current account of the EU27 recorded an external current account deficit of 50.8bn euro for Q2 2010. In Q2 2009 the deficit was 44.7bn euro and in Q1 2010 it was 34.8bn euro. There was an external trade balance of 18.6bn euro in services compared with 16.4bn euro in Q2 2009 and 10.8bn euro in Q1 2010.

Industrial Production Stable In Europe

The industrial production index for the euro area and the EU27 remained unchanged in July compared with June 2010 according the Eurotstat statistics. Compared with July 2009 the index fell by 7.1% in the euro area and 6.8% in the EU27.

Production of non-durable consumer goods increased by 0.1% in both areas. Production of durable consumer goods fell by 0.6% in the euro area and 0.8% in the EU27. Capital goods grew by 0.1% in the euro area but in the EU27 area the index fell by 0.2%. Energy production fell by 0.1% and 0.4% respectively over the month.

The annual comparison shows that production of intermediate goods grew by 9.2% in the euro area and 9.5% in the EU27. Capital goods grew by 9.2% and 9.3% respectively. Durable consumer goods production increased by 5.3% in the euro area and 7% in the EU27 and non-durable consumer goods production grew by 3.6% and 3.7% respectively. Energy production increased by 1.9% in the euro area but fell by 0.1% in the EU27.

Euro Area Trade Surplus Down On Year

The euro area had a trade surplus of 1.8bn euros with the rest of the world in April 2010 compared with a 2.6bn euro surplus in April 2009. Exports fell by 2.4% in April 2010 against March 2010 and imports fell by 3.5%. The first estimates for the EU27 report a 10.2bn euro trade deficit on an annual basis. On a monthly basis there was a deficit of 7.2bn euros. Imports fell by 2.8% and exports by 2.4%.

The figures for January to March 2010 show that the EU27 deficit for energy rose by 66.6bn euros but the surplus for manufactured goods rose by 35.9bn euros. EU27 exports to all of its major trading partners grew in January-March 2010 especially to China (+48%), Brazil (+43%) and Turkey (+41%). The biggest increase in imports was to Russia with 35%.

The EU27 trade surplus with the US increased by 14.2bn euros. The trade deficit with China decreased from 37bn euros to 34.6bn euros but increased with Russia from 10.5bn euros to 18.2bn euros. The largest total trade deficit was the UK with 24.9bn euros.

Employment Stable In Euro Area

Employment in the euro area was stable in the first quarter (Q1) of 2010. During the same period in the EU27 the number of people employed decreased by 0.2% or 455,000 people.

Employment fell by 1% in the euro area in manufacturing and by 1.2% in the EU27 and in construction by 1.5% and 2.3% respectively. In financial services and business activities employment increased by 0.5% in the euro area and 0.3% in the EU27. Employment in agriculture rose by 0.2% in the euro area and 0.3% in the EU27.

European Annual Inflation Goes Up To 1.5%

Annual inflation in the euro area went up to 1.5% in April from 1.4% in March, according to the HICP from Eurostat. The monthly rate was 0.5% in April 2010. EU annual inflation was up to 2% in April from 1.9% in March. Last year it was 1.3%. The monthly inflation rate was 0.4%.

At the national level, the lowest rate of HICP inflation was in Latvia with -2.8% and then Ireland with -2.5%. They were the only negative rates this month. The highest rates of inflation were in Hungary 5.7%, Greece 4.7% and Romania with an inflation rate of 4.2%.

The main components contributions were from energy 9.1%, transport 5.9% and alcohol and tobacco with 4.2%. The lowest contributions were from recreation and culture -1%, communications -0.6% and food with a negative percentage of 0.2%.

GDP Rose 0.2% In Europe In First Quarter

GDP rose by 0.2% in Q1 2010 compared with the previous quarter in both the euro area and the EU27 according to Eurostat. Compared with the same quarter in the previous year GDP increased by 0.5% in the euro area and by 0.3% in the EU27.

US GDP rose 0.8% Q1 2010 on Q4 2009 and by 2.5% in Q1 2010 on Q1 2009. In EU27, Slovakia's GDP rose by 4.6% and Latvia's fell by 5.1%. In the euro area, Germany's GDP rose by 1.5% and Greece's fell by 2.3%.

Euro Industries Produce 1.3% Growth

Eurostat published figures show the euro area increased industrial production by 1.3% in March 2010 compared with February and the EU27 managed 1.2%. On an annual basis the euro area increased production by 6.9% in March 2010 and the EU27 by 6% compared with March 2009.

Looking at the main industrial groupings on the monthly basis, capital goods increased by 1.5% in the euro area and by 1.2% in EU27. Durable consumer goods increased by 0.6% in the euro area. Non-durable consumer goods increased by 1.2% in the euro area and by 1.1% in the EU27. Intermediate goods rose 0.5 and 0.8% respectively. Energy production fell by 0.5% and 0.2% respectively.

On annual comparisons intermediate goods rose 11.7% in the euro area and 10.6% in the EU27, capital goods rose by 4.5% and 4.9% respectively and non-durable consumer goods rose 4.6% and 3.2% with durable consumer goods rising by 2.2% and 3.8%. Energy increased production by 4.9% in the euro area and 2.9% in the EU27 over the year between March 2009 and March 2010.

The country with the biggest increase in production over the month according to the survey was Latvia with 9.9% then Portugal with 7.7%. The Czech Republic reported the smallest increase with 0.7%. The biggest decrease in production was in Ireland with a fall of 2.6%. Over the year the largest increase was in Estonia with 11.6% and the biggest decrease was in Greece with 4.5%. Latvia and Poland also had large increases in production over the year on 11.4% and 11.2%. Denmark's production fell by 1.9%. Norway, a member of EFTA and not the European Union, reported a decrease of 5.1%.

Increase In European Industrial PPI In March

The monthly industrial producer price index for the euro area went up 0.6% and the EU27 0.7% in March 2010 compared with February 2010. Price rises in the energy sector increased by 1.7% i the euro area and 1.6% in the EU27. Durable consumer goods also rose by 0.1% in the euro area and 0.3% in the EU27. Capital goods were unchanged in the euro area but increased by 0.2% in the EU27. Non-durables fell by 0.1% and remained stable respectively.

The index went up by 0.9% in the euro area and 1.7% in the EU27 in March 2010 compared with March 2009. The total industry index excluding energy 0.1% in the euro area and 0.3% in the EU27. The prices index in the energy sector rose by 2.8% and 5.12% respectively. Intermediate goods rose by 0.8% in both zones. Durables increased by 0.3% in the euro area and 0.5% in the EU27. Non-durables fell by 0.5% and 0.2% respectively. Capital goods fell by 0.5% in the euro area and 0.1% in the EU27.

Euro Unemployment Rate Is 10%

The seasonally adjusted unemployment rate for the euro area for March 2010 was 10% the same as February. The unemployment rate in the EU27 was 9.6% the same as February and compared with 8.5% in March 2009.

It is estimated that 23,130 million people in the EU27 were unemployed in March 2010. The estimation includes 15,808 million in the euro area. The increase in numbers of people means 123,000 more unemployed in EU27 and 101,000 in the euro area.

Male unemployment increased from 8.9% to 10% in the euro area between March 2009 and March 2010 and 8.6% to 9.8% in EU27, women from 9.3% to 10.1% in the euro area and 8.5% to 9.4% in EU27. Youth unemployment in March 2010 was 19.9% in the euro area and 20.6% in EU27 compared with 19% and 18.9% respectively. The US unemployment rate was 9.7% in March 2010 and in Japan it was 4.8% in February 2010.

MUICP Is 1.5% For April 2010

Euro area inflation is expected to be 1.5% in April from 1.4% in March according to Eurostat, the statistical office of the European Union. Euro inflation is measured by the Monetary Union Index of Consumer Prices (MUICP).

Continued Recovery In The OECD

Indicators from the OECD continue to point to recovery in OECD economies. The composite leading indicators (CLI) for Canada, France, Italy, Germany and the UK all suggest more expansion in the business cycle than last month. In these OECD economies the main drivers of expansion are finance and business confidence. Non-member economies are also doing better with all major non-members in the recovery phase of the business cycle.

The CLI for OECD countries increased 1 point in October 2009 which is 5.7 points higher than the same period last year and the outlook is for recovery. The UK CLI increased by 1.3 points in October which was 8.8 points higher than last year and the outlook is expansion. The Euro area increased by 1.3 points, 8.8 points higher than last year. The US CLI increased 1 point, 3.9 points higher than last year. France was 10.2 points up on last year, Germany 9.2 and Italy 12.5 points up on last year.

Among the non-members China's CLI had increased 0.2 points in October and 5.7 points on last year, India 0.2 and 4 respectively, Russia increased 1.6 points in the month but was 1.1 points lower over the year and Brazil had increased by 0.7 points in October and decreased 4.2 points since October 2008.

The outlook for the OECD economies is one of recovery and for the Euro area expansion. The economies of Canada, France, Germany and Italy are also expected to expand and G7 and Asian economies are expected to be in the recovery phase as are the major non-member economies. It should also be noted that any signs of recovery contained in the data are more concerned with recovery happening rather than any suggestion of the strength of the recovery.

Signs Of Economic Recovery Getting Stronger

OECD statistics for July are pointing to a broad economic recovery across all of the G7 countries. France, Italy and the UK are especially encouraging as the signs are that the main indicators in these economies are higher than this time last year. Most other countries indicators are better also showing signs of recovery but still lower than last year and there are signs of a trough appearing in Brazil. There are also signs of recovery in China, India and Russia. The OECD CLI increased 1.5 points in July, 1.9 points lower than July 2008. The euro area CLI increased by 1.9 points, 1.4 points higher than a year ago.