EuroCOIN Points to Improvement in Euro Area's Fourth Quarter GDP

In spite of financial troubles in Ireland, Greece, Spain and Portugal, forward looking indicators are showing signs of improvement in the level of economic activity in the Euro Area as a whole. The latest measure to show improvement, albeit a small one, is EuroCOIN, a coincident indicator expressed as the quarter to quarter increase in GDP for the Euro Area. EuroCOIN is produced by a network of researchers associated with the Bank of Italy and published by the Bank and the Center for Economic Policy Research (CEPR) in London.This indicator, after declining to 0.34% in September from a post recession peak of 0.78% in January, has risen in the last two months, reaching 0.41% in October and 0.45% in November. According to the compilers of the indicator, much of the improvement in November was due to stronger consumer and business confidence.

EuroCOIN has been a good indicator of the quarter to quarter changes in real GDP, as can be seen in the attached chart. Recently it has foreshadowed the slowdown in real GDP from the first quarter and is currently forecasting a small improvement. The November figure suggests an annual rate of increase of 1.8% in the Euro Area's real GDP, compared with the actual increase of 1.5% in the third quarter.

EuroCOIN can be found in the Haver database, EUROSTAT. EO25COIN is in the National Accounts and the Business Cycle Indicators and Surveys sections