Recovery gathers momentum

The past month has brought further signs that the euro-zone is recovering, albeit quite gradually. For a start, July and August’s increases in industrial production suggest that output in the sector should expand by about 2% in Q3. Coming after a 1% fall in Q2, this alone would push quarterly GDP growth up to +0.5% in Q3 from -0.2% the previous quarter. What’s more, October’s surveys are consistent with a pretty good start to Q4 - the composite PMI index now points to quarterly gains in GDP of about 0.3%. There are still major doubts over the extent to which consumers will contribute to the recovery, but at least the economy seems to have turned a corner.