Price cuts boost euro zone businesses

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Business activity in the euro zone picked up at its fastest pace since mid-2011 this month – and far quicker than expected. As Sonia Legg reports, even slowing growth in France following the Nov. 13 attacks was offset by a buoyant Germany.

Price cuts boost euro zone businesses

The Paris attacks have left many in Europe feeling nervous.

And new surveys show the key service sector in France did slow in November.

But not too much – and the reading remained above the key 50 mark that indicates growth.

Markit’s data also showed private sector activity in France increased for the 10th straight month.

Brenda Kelly is from London Capital Group.


“I think the lower interest rates, the weak euro and and the strengthening of the dollar vis-a-vis that can only be a decent driver of growth within the business industry across Europe and this momentum from the two currencies is probably set to continue.”

Germany’s private sector, which accounts for two-thirds of the country’s economy, rose to almost 55 points.

The figures suggest Europe’s biggest economy is defying worries over a slowdown in China and the emissions scandal at VW.

And across the region activity was far faster than expected.


“The fact that the euro zone composite is at a four year high does spell a lot of good news for the euro zone and with Germany powering ahead, lower unemployment and a slew of new business orders it should keep it on the straight and narrow.”

There were some worrying aspects to the data – much of the growth was driven by firms cutting prices for a second month.

That’s not going to boost inflation, meaning the European Central Bank is still likely to give the region another push when it meets next week.

Tags : businesses, zone, euro, boost, cuts, price

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