EU Manufacturing Numbers Must Be Making Draghi Proud
Skerdian Meta • 2 min read
The economy of the Eurozone has been in doldrums for quite some time. Shortly after the 2008 global financial crisis the investor sentiment plunged and the business activity has been anaemic since. This situation continued for many years so the financial analysts started assuming that Europe will follow on Japan´s footsteps, which has been biting the dust for decades now since the 1990s crisis in Japan.
The BOJ (Bank of Japan) has taken many steps in more than two decades, but nothing seems to work. The ECB (European Central Bank) has followed a similar path of negative interest rates and very loose monetary policy, but only started it about a couple of years ago.
There was a lot of scepticism and objection, particularly from the European hairy mammoth, which is Germany. But, in the last few months we are starting to see the sectors of the EU economy pick up. A couple of weeks ago, the service sector data from most European countries showed an increase in the non-manufacturing sector.
Draghi took those numbers and shoved them up the Bundestag last week. It turns out the Bundestag which has been the biggest opponent of the ECB QE programme liked it. For once they agreed with Draghi, that they must give it some time before getting some results back.
Today we see that the manufacturing sector is starting to pick up as well. The Italian, Spanish and French manufacturing numbers all beat the expectations. The growth in the Austrian manufacturing accelerated as well in September and in Germany this sector reached a three month high.
These are some pretty good numbers considering that the manufacturing sector makes up for a considerable portion of the EU economy, unlike the US and the UK. The Euro hasn´t been moved much by this economic data but I´m positive that Draghi must be dancing and jumping around in his office in Brussels. Hopefully, the recuperation continues in the coming months/years; that would help the fragile global economy a lot.