Fri Dec 8th, 2006 at 04:59:25 AM EST
From Tgerathy in this morning’s Salon de News via the Wall Street Journal (behind a subscription wall):
Europe Is Giving Global Economy A Surprise Boost Amid U.S. Lull
Europe's economy is firing on all cylinders after years of feeble growth, helping to sustain global expansion as the U.S. economy slows and surprising many economists who doubted the Continent could muster enough demand to break its reliance on exports.
Europe's economic recovery was ignited by rising exports, but it is now spreading to investment, job creation and consumer spending. . . .
Euro-zone gross domestic product is on course to grow by 2.7% this year, unspectacular by recent U.S. standards but a big improvement on the 1.4% growth the euro zone averaged the previous five years. . . . next year, most forecasters still expect an expansion of around 2%. By Europe's lackluster standards, that's nothing short of a comeback -- and is good news for exporters and investors from the U.S. and Asia. . . .
The long slowdown led anxious Europeans to save their incomes . . . creating pent-up demand that is now being unleashed as confidence gradually returns. . . .
Germany, for years the sick man of Europe, has led the revival, reclaiming its place as the region's growth engine. . . . total investment in Germany is set to grow by 5.8% this year, according to the OECD, up from 1% last year and declines in the four previous years. Revived investment has helped bring Germany's chronic unemployment below four million in November, from more than five million in January. . . . rising employment has allowed a modest recovery in consumer spending, which is expected to grow by around 0.8% this year after stagnating or shrinking since 2001. . . .
Investment is also improving in other European countries . . . "The recovery in Germany is lifting Italy and helping France," . . . In both countries, stronger exports are helping companies to raise investment. . . .
Consumer spending hasn't improved as strongly as investment, but even here there are signs of improvement. Euro-zone consumption rose by 0.6% during the third quarter . . .
Sounds like good economic news heading into 2007...wonder what next year brings us?