Alarmingly low confidence in European economy
New figures: Low confidence is a sign of weak growth in our export markets, and that’s bad news for Danish companies with overseas sales. This worries DI’s senior analyst Allan Sørensen.
Purchasing managers’ expectations for the economy fell from 50.6 in October to 50.3 in November, show new figures from Markit PMI.
“Purchasing managers’ confidence in the economy in the Eurozone is worryingly low, and unfortunately this suggests that growth has come to a halt. In recent months overall confidence has been at a level that points to standstill,” says Senior Analyst Allan Sørensen, the Confederation of Danish Industry (DI).
“Historically, there has been a close correlation between purchasing managers’ outlook and actual economic growth. The low confidence is therefore bad news for Danish export companies, because it testifies to difficult export conditions in European markets,” says Allan Sørensen.
“Purchasing managers’ expectations increased slightly in both France and Germany, but it wasn’t enough to compensate for falling activity in the rest of the EU,” says Allan Sørensen.
“France is one of the bright spots in the European economy, and French purchasing managers expect relatively decent growth in the economy. France is not experiencing the same slowdown that has hit their German neighbours,” says Allan Sørensen.
In Germany, the purchasing managers index rose slightly from 48.9 in October to 49.2 in November.
“German spirits rose slightly in November. Overall business confidence still remains below 50, signalling falling activity in Germany. Particularly German manufacturing companies have a bleak outlook on the current situation,” says Allan Sørensen.
“Germany is an enormous market for Danish exports and the biggest economy in Europe. It is vital for Danish exports and European growth that the German industrial engine starts running again,” says Allan Sørensen.
“Danish companies bring in the main part of their export earnings from EU markets. The low confidence is therefore bad news for Danish export companies, because it testifies to difficult export conditions in European markets,” says Allan Sørensen.
Last year, EU countries bought Danish goods and services worth DKK 680 billion.
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