While Germany pulls away, troubled Italy, Spain and Greece are going backwards!
Eurostat, the European Union's statistical office, today released its first estimate for European growth for the first quarter of 2012. The bad news is European growth is really hard to find.
Growth: zero, zilch and zip
In the 17-country euro area (EA17)-- which consists of Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland -- Eurostat's 'flash estimate' was for quarterly growth of 0.0%. In other words, growth was nil, nothing and nowt in January to March.
Nevertheless, at least the euro area as a whole avoided slipping into recession (by recording two quarters in a row of negative growth). In the final quarter of 2012, the eurozone economy shrank by 0.3%. Thus, another quarter of negative growth would have produced a double-dip recession similar to what the UK encountered during these six months.
For the 27-member European Union (EU27) -- the above 17 countries plus Bulgaria, the Czech Republic, Denmark, Latvia, Lithuania, Hungary, Poland, Romania, Sweden and the UK -- quarterly growth was also 0.0%.
Trapped in a time warp
Over the course of the 12 months to March 2012, yearly economic growth was also 0.0% in the EA17 and 0.1% in the EU27 -- almost exactly in line with the latest quarterly changes.
In short, the EU's GDP (gross domestic product, or total economic output) has gone nowhere over the past year. Ouch!
Thriving, surviving or diving?
Then again, these top-level figures mask wide national variations across Europe.
To show you the thrivers, survivors and divers, here are the individual economic growth rates for Europe's biggest economies, plus those for the UK and US. These are sorted from highest to lowest quarterly growth:
| State | Quarterly growth (%) | Yearly growth (%) |
|---|
| Finland | 1.3 | 2.9 |
| US | 0.5 | 2.1 |
| Germany | 0.5 | 1.2 |
| Austria | 0.2 | 0.7 |
| France | 0.0 | 0.3 |
| EU27 | 0.0 | 0.1 |
| EA17 | 0.0 | 0.0 |
| Portugal | -0.1 | -2.2 |
| UK | -0.2 | 0.0 |
| Netherlands | -0.2 | -1.3 |
| Spain | -0.3 | -0.4 |
| Italy | -0.8 | -1.3 |
| Greece | N/A | -6.2 |
As you can see, four of these 11 states recorded positive growth in the first three months of 2012. Finland's economy grew by 1.3%, while the US and Germany both grew by 0.5% and Austria grew by 0.2%. France was flat, thanks to zero growth.
However, these five states saw their economies shrink: Portugal (-0.1%), the UK and the Netherlands (both -0.2%), Spain (-0.3%) and Italy (-0.8%). Also, though the latest figure wasn't available for Greece, it is guaranteed to be the worst of the lot.
Checking year-on-year growth, Finland topped our table with a healthy increase of 2.9%. The US (2.1%) was second, followed by Germany (1.2%) in third. Austria (0.7%) and France (0.3%) also recorded positive yearly increases.
Alas, the UK saw no growth in the year to March 2012, while yearly growth was negative in Spain (-0.4%), the Netherlands and Italy (both -1.3%) and Portugal (-2.2%). Worst hit by far was struggling Greece, whose economy collapsed by 6.2% -- a truly terrible result for the troubled Hellenic state.
Going for growth
In summary, while economic growth is stagnating in Europe, some countries -- notably the US and Germany -- are pulling away from the pack. Investors would do well to bear this growth picture in mind when looking for international candidates to join their share portfolios.
Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors Of 2012" -- our guide to three favourable industries. This free report will be dispatched immediately to your inbox.
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