Market trends: Europe--End-use developments: Recession over but slow recovery from here

摘要

The major economic development over the past month came from the news that both Germany and France have emerged from recession, while sentiment indicators continue to gain ground. The German economy enjoyed a modest expansion of 0.3 percent q-o-q in the second quarter which resulted in it officially emerging from recession, although it is worth noting that this represented a 5.9 percent y-o-y contraction. Significantly, the upturn seems to be related to government spending, although with the car scrapping scheme set to come to an end this year and with consumer spending expected to struggle in 2010 as a result of rising unemployment and slow wage growth, we do not expect a strong economic recovery in 2010. However, on a more positive note, confidence does continue to improve among businesses, with the CRU/Markit order book index of aluminium intensive goods moving ever closer to the expansion level of 50.