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EZ biz activity slow but 'not all bad'

Tuesday, December 16, 2014 - 02:26

France's business downturn eases in December but German private sector growth decelerates to its slowest pace in 18 months, according to new data. Lower oil prices may mitigate fears of a renewed downturn at the start of next year. David Pollard reports.

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Hold the front page - Angela Merkel is topping the poll ratings - in France. A majority of French voters view the German chancellor as a good thing - and want their government to emulate her reforms. The surprise results came out in a poll by IFOP for for a French newspaper. Pollster Damien Philippot. SOUNDBITE) (French) POLLSTER AT POLLING INSTITUTE IFOP, DAMIEN PHILIPPOT, SAYING: "Angela Merkel has a popularity rating that would make French leaders green with envy. 72 percent of the people we interviewed say they have a good opinion of Angela her. It's a high percentage on the right, which isn't surprising, but also on the left -- 64 percent of voters." The numbers don't stack up so well for Germany itself. Latest PMI data shows private sector growth at its slowest in 18 months. There was a pick-up in manufacturing - but services fell on a month earlier. And French manufacturing continued its slide - although services activity rose above forecasts. It's not all bad, says Christian Schulz of Berenberg. SOUNDBITE (English) CHRISTIAN SCHULZ, SENIOR ECONOMIST, BERENBERG, SAYING: ''The highlight for me was that the oil price was finally coming through in lower input prices for manufacturers. We've been waiting for that to come through in the PMIs for a while and that's likely to get better and that's been apparently the support for the manufacturing PMIs. Remember that manufacturing is by far the most important sector in Germany, so manufacturing going up is good news.'' The poll did pick out one thing the French don't like about Merkel's Germany: low wages. Although in fact , workers in Belgium were the latest to voice their unhappiness at euro zone austerity. Their strike action hit air and rail traffic on Monday. After a wave of protest in Italy and Greece and elsewhere, brace for more next year, says Mike Gallagher of Ideaglobal. SOUNDBITE (English) MIKE GALLAGHER, DIRECTOR OF RESEARCH, IDEAGLOBAL, SAYING: ''I think you need to look at popular backlash generally in 2015 as a story. And that's not just a question of industrial action in Belgium today or Italy as we get into 2015, but it's also the election process which restarts. We could have a general election as soon as January in Greece, which poses all kind of problems and which would probably produce a real drama, but we also need to be looking at elections in Spain later this year. Generally, there is a bit of a switch leftwards in Europe and that's anti-austerity and that could prove challenging for the markets.'' But there was one other piece of good news from Germany. The ZEW monthly survey of economic sentiment climbed to 34.9 this month - far exceeding forecasts and its highest level since April.

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EZ biz activity slow but 'not all bad'

Tuesday, December 16, 2014 - 02:26