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Economy in Brief

EMU Services Sag
by Robert Brusca  May 4, 2011

The EMU services sector took a step back in April and sets up just below its standing in February. The service sector in France is still pushing ahead for improvement; Spain's index while still below its February standing rose in April.

For EMU and Germany the standings of the current services index between its high/low readings is at about the 80th percentile. For France this standing is near the 90th percentile. Italy and Spain are near their respective 60th percentiles.

The service sector is the jobs-producing sector. It has recovered despite this month's set-back. But it has not recovered fast enough to boost consumer confidence significantly. Consumer confidence is strong only in German where it lies in the 83rd percentile of its range in April. For the whole of the Euro-Area the standing is in the 61st percentile. But for the next strongest large country reading, after Germany, the metric drops to the 50th percentile for Spain, the 45th percentile in France and to the 17th percentile in Italy. In the UK, an EU member, confidence stands in the 28th percentile.

As we saw earlier this week the manufacturing sectors are doing relatively better across EMU. But the service sector while improving has lost ground this month and is lagging behind. Jobs gains are not coming fast enough in most EMU members- Spain continues to post extremely high levels of unemployment. Amid these conditions with inflation said to be too-high by the ECB interest rates have risen and are expected to rise again soon. The euro exchange rate has risen sharply too and that casts a pall over MFG in the weaker EMU nations that are struggling more with their competitiveness.

Various Looks at the UK, EU and EMU Services Sector
  Apr-11 Mar-11 Feb-11 3Mo 6Mo 12Mo %-ile
Euro-Area 56.73 57.16 56.75 56.88 56.04 55.58 80.9%
Germany 56.82 60.06 58.58 58.49 59.03 57.36 78.9%
France 62.94 60.41 59.73 61.03 58.46 58.96 89.7%
Italy 52.20 53.26 53.07 52.84 52.17 51.80 57.4%
Spain 50.43 48.70 50.85 49.99 48.96 49.39 68.0%
Ireland #N/A 51.15 55.07 #N/A #N/A #N/A #N/A
EU only
UK (CIPs) #N/A 57.11 52.60 #N/A #N/A #N/A #N/A
Percentile is over range since May 2000
EU Commission Indices for EU and EMU
EU Index Apr-11 Mar-11 Feb-11 3Mo 6Mo 12Mo %-ile
EU Services 7 10 10 -11.00 -10.67 -12.17 61.1%
EMU Apr-11 Mar-11 Feb-11 3Mo 6Mo 12Mo %-ile
Services 10 11 11 10.67 10.17 7.08 61.7%
Cons Confidence -12 -11 -10 -11.00 -10.67 0.67 61.1%
Consumer Confidence by Country
Germany-Ccon 8 9 9 8.67 9.33 4.33 93.2%
France-Ccon -19 -18 -20 -19.00 -18.50 -19.08 45.0%
Ital-Ccon -26 -24 -24 -24.67 -24.17 -23.08 17.1%
UK-Ccon -24 -22 -24 -23.33 -21.17 -17.58 28.9%
Percentile is over range since May 2000
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