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Economy in Brief

EMU Service Sector Continues To Improve
by Robert Brusca May 05, 2010

The services sector continues to improve in EMU with the EMU and German indices rising in April to their strongest levels since late in 2007 (France was last stronger in Nov of 2009; Italy’s index slipped in April).

While Germany and the overall EMU measures continue to rise strongly some countries in the Zone are slowing their progress, as the French and Italian comparisons show. The services sector is still where the jobs are and this sector is not as vibrant as the manufacturing sector.

The Euro-Area retail sales for April were flat in volume terms and barley higher Yr/Yr. The consumer sector has just not come alive in Europe and that is a key part of the services sector.

Looking ahead there will be challenges to Europe’s service sector. The ash cloud that shut down air transportation has just shut down a few more airports in Scotland. Those interruptions will probably affect services, especially tourism. Greece which is a hot tourism destination will have been off limits to most tourists during the time of its upheaval. And, since Greece is in the Zone there is no such thing as a post crisis ‘drachma discount.’ Indeed, with strikes still in progress in Greece there is no telling how much the tourists season will harmed as we head into summer.

Markit Services Indices for EU/EMU
  Apr-10 Mar-10 Feb-10 3Mo 6Mo 12Mo Percentile
Euro-Area 55.60 54.08 51.81 53.83 53.44 50.77 76.4%
Germany 55.22 54.86 51.89 53.99 53.04 51.11 70.7%
France 59.17 53.80 54.60 55.86 57.23 53.72 85.0%
Italy 54.47 55.34 50.76 53.52 52.53 49.35 69.3%
Spain 50.93 51.27 47.12 49.77 48.21 45.82 70.6%
Ireland 51.02 49.61 48.84 49.82 48.15 46.05 56.0%
EU only
UK (CIPs) #N/A 56.46 58.41 #N/A #N/A #N/A #N/A
EU Commission Indices for EU and EMU
EU Index Apr-10 Mar-10 Feb-10 3Mo 6Mo 12Mo Percentile
EU Services 4 1 0 -16.33 -16.33 -19.42 54.3%
EMU Apr-10 Mar-10 Feb-10 3Mo 6Mo 12Mo Percentile
Services 5 1 1 2.33 -0.17 -8.21 55.6%
Cons Confidence -15 -17 -17 -16.33 -16.33 -11.94 54.3%
Consumer confidence by country
Germany-Ccon -7 -13 -17 -12.33 -15.00 -19.58 60.5%
France-Ccon -20 -19 -17 -18.67 -18.00 -22.75 42.5%
Ital-Ccon -21 -22 -22 -21.67 -19.17 -18.75 31.4%
UK-Ccon -6 -5 -2 -4.33 -6.00 -10.42 76.3%
percentile is over range since May 2000
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