Eurostat today reported Euro-Zone GDP for Q4 2004. It grew 0.2% (1.0% annualized) in that quarter; this was marginally stronger than in Q3, which is also shown as 0.2%, but annualizes to 0.6%. Q4 was 1.6% ahead of the year-earlier period and the year as a whole saw growth in the 12 countries of 1.8%. Both yearly growth rates were much improved over 2003, when Q4/Q4 was 0.8% and the overall year relative to 2002 was just 0.5%.

The growth improvement was spread across most expenditure segments. European consumers expanded their spending somewhat in Q4, relative to the performance in both Q3 and the year-ago quarter. Exports in the region picked-up considerably; so did imports, but on net, trade assisted growth in being a significantly smaller drag than it had been the year before. Investment firmed considerably. Among major components, only government consumption failed to accelerate, although it did continue to expand.

Several sectors contributed to Europe's growth. Value added in trade and transportation gained 2.6%, Q4/Q4, versus 0.4% in 2003. Construction activity expanded 0.8%, but it had contracted by 1% in 2003, again on a Q4/Q4 trend basis. Agriculture and related sectors surged 5.9%, a turnaround from a 2.0% contraction the prior year. Industry grew 1.2%, slightly ahead of 2003's 0.9%. However, industrial activity declined on a quarterly basis in both Q3 and Q4, leaving it on a weakening path as the year ended.