The latest findings of the CEPR-EABCN Euro Area Business Cycle Dating Committee (EABCDC)

No Investment, No Growth

The CEPR-EABCN Euro Area Business Cycle Dating Committee convened on 21 October 2024 to evaluate the state of economic activity in the euro area, using data through the second quarter of 2024. The findings of the Committee are similar to those of two quarters ago (Spring 2024). Although GDP growth remained positive, it was only about one-half percent year over year as of 2024Q2. This is in line with the anaemic growth in the single currency zone over the past two years.

Growth, such as there is, is driven by public sector output and net exports, signalling a general lack of domestic private sector demand. Firms are drawing down inventories rather than increasing production, and business fixed investment is declining, both suggesting low private sector confidence.

The essentially flat output profile contrasts with continued employment growth. While low unemployment is always welcome, increasing employment combined with stationary output, as in the past few years, implies that labour productivity is stagnating. This lack of productivity improvement is a major reason behind the increasing divergence between the post-pandemic output trajectories of the euro area and the United States.

The full statement of the CEPR-EABCN Euro Area Business Cycle Dating Committee is available here.

About the Euro Area Business Cycle Dating Committee

The CEPR-EABCN Euro Area Business Cycle Dating Committee establishes the chronology of recessions and expansions of the eleven original euro area member countries plus Greece for 1970-1998, and of the entire euro area from 1999 onwards. 

It also comments, in the spring and in the fall, on the current state of aggregate economic activity in the euro area and launches research initiatives designed to better monitor and understand aggregate economic developments in the euro area.

Dating activities and bi-annual statements on the state of euro area economic activity are conducted in total independence of EABCN. Research initiatives launched and pursued by the Committee are subject to the approval and evaluation of the EABCN Scientific Committee.