Rising inventories and investment have kept EU growth in positive territory recently despite weak trade and lackluster household spending. However, new data show the paltry recovery appears to be losing steam again.
Quarterly gross domestic product (GDP) in the 17-nation eurozone grew 0.1 percent between July and September, the European Statistics Office, Eurostat, announced Wednesday, as it confirmed a preliminary estimate made in November.
Rising inventories added 0.3 points to overall eurozone growth, while investments put in another 0.1 point, Eurostat data showed.
Net trade, however, had a negative contribution in the three months to September contracting 0.3 percent. In addition, retail sales fell further in October, down 0.2 percent on the previous month of September.
Eurozone GDP growth of 0.1 percent in the third quarter followed economic expansion of 0.3 percent in the second quarter, adding to signs that the recovery in the 17-nation currency area is losing momentum.
Moreover, the eurozone purchasing managers' index (PMI), which is a gauge of business activity, fell from 51.9 points in October to 51.7 points in November. The business barometer is compiled by UK-based research group Markit, and any index reading above 50 points indicates economic growth.
“While we shouldn't lose sight of the fact that the region is growing again, it's clearly a concern that the rate of growth remains so fragile,” Markit Chief Economist Chris Williamson said in statement released Wednesday.
Noting that PMIs for Italy and France - the eurozone's second and third largest economies - slowed further, Williamson added that Italy's 10-month recession was likely to continue while France might slip back into a new recession in the coming month.
According to Markit data, Germany was set to further grow robustly with its PMI hitting a 29-month high of 55.4 points in November. And Spain was the other bright spot as the eurozone's fourth largest economy would continue to grow in the final quarter of 2013 despite high unemployment, Markit said.
uhe (Reuters, AP, dpa)