Surprisingly Positive News Emerges in EU Economic, Credit Studies

A pair of studies released this week found potential early signs of recovery in a beleaguered European Union that has been long-waiting for optimism.

A European Central Bank (ECB) study on bank-based credit lending found conditions may be easing. The Euro Area Bank Lending Survey for the second quarter noted the net percentage of banks tightening credit standards on businesses seeking loans did not grow over the last three months. ECB analysts noted that was a surprise. Additionally, banks’ perceptions of the risk of lending to EU-based companies have stabilized. even if at historical escalated levels.

Meanwhile, a survey by Markit, a global financial information services firm, found EU member nations at their collective best, from the standpoint of manufacturers, in 18 months. The Markit Flash Eurozone Purchasing Managers’ Index (PMI) reached 50.4 in July, up from 48.7 from June. Many market analysts characterized that as unexpected. Within the statistics, manufacturers reported the largest monthly increase since June 2011. Two of the best manufacturing rebounds were noted in Germany and France. Markit Chief Economist Chris Williamson called the overall reading “encouraging."

Markit also published PMI results for the United States this week that show a four-month high on the quickened pace of manufacturing sector growth.

- Brian Shappell, CBA, CICP, NACM staff writer
Note: See the extended version of this story in this week's edition of NACM eNews, available late Thursday afternoon (EST) at in the "Resources" section.

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