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Euro zone economy starts 2017 with steady progress

Tuesday, January 24, 2017 - 01:43

The euro zone starts 2017 by maintaining its recent solid growth as a weaker currency boosts orders for goods and services, a survey shows, but rising political risks could take their toll. David Pollard reports.

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It's one for the sceptics to mock. Paris's first driverless shuttle bus: a euro zone with little leadership in a key election year, they might say. But as for the bus itself, it's going along nicely. (SOUNDBITE) (English) KATHLEEN BROOKS, RESEARCH DIRECTOR, CITY INDEX, SAYING: "The economy seems to be in the right direction, we've seen the stock market do quite well, and the euro is starting to lift as well but not too much that it chokes off growth." After a five-year high in December, it was steady as you go in January. A euro zone PMI reading of 54.3 comfortably above the 50 that denotes growth. New orders strong - few signs yet of the clouds a protectionist new US president might cast. And Germany keen to point out silver linings elsewhere. (SOUNDBITE) (German) GERMAN VICE CHANCELLOR AND ECONOMY MINISTER, SIGMAR GABRIEL, SAYING (ON DONALD TRUMP): "We must not underestimate what he has in store .... We must look for partners that want to work together .... When one door closes, and he's closing doors, another opens somewhere else. I am sure about this." And for trade, markets keen to see not Trump at the wheel - but his nominee as US commerce secretary. Billionaire Wilbur Ross earned his fortune in part by running businesses that offshored thousands of US jobs. (SOUNDBITE) (English) KATHLEEN BROOKS, RESEARCH DIRECTOR, CITY INDEX, SAYING: "The actual detail will come down to the commerce secretary himself, so it's very promising for the world economy and certainly for global trade that Wilbur Ross doesn't like the idea of protectionism even though Trump struck a very protectionist note during his inauguration speech." But companies surveyed also note mounting costs - input prices in Germany rising at their sharpest pace in five years. A surge in inflation likely to be another bump in the road ahead.

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Euro zone economy starts 2017 with steady progress

Tuesday, January 24, 2017 - 01:43