Euro zone productivity growth steadied in June after months of slowdown while France replaced Germany at the top of the productivity growth league, according to indices compiled by researchers NTC for consultancy Deloitte. The gauge of euro area output per worker, compiled from responses to NTC's poll of 5,000 firms across the European Union, peaked in February but had retreated steadily to an eight-month low in May before nudging up again last month. Fresh stability in the productivity gauge comes despite the fact NTC's composite measure of euro zone output, released earlier this month, retreated in June and the pace of job-shedding eased to its lowest level in almost two years. "Eurozone manufacturing output per head rose at its fastest rate since the data were first collected in January 1998," the Deloitte/NTC report said, by way of explanation. "Service sector productivity growth also remained strong, but was still below February's survey record rate." NTC said its euro zone productivity index rose to 55.7 in June from May's 55.6 and remains well above a four-year average of 53.0.
As with NTC's Purchasing Managers' survey, a reading above 50 indicates improvement over the period and below 50 is a deterioration. The series dates back to 1998 and the monthly euro zone index has now been above 50 for 30 successive months.
FRANCE LEAPFROGS GERMANY
The euro zone data reflects responses from companies in eight countries and showed French productivity growth leapfrogging that in Germany last month -- registering a reading of 57.1 in June compared with 56.3 in May and a German reading of 56.6. The German index was down slightly from 56.8 in May. Italy also declined and continued to be the laggard of the big three euro zone economies in June -- falling to 53.3 from 54.0 in May. Elsewhere, the British productivity index fell to 55.2 in June from 55.6 previously as recruitment continued to pick up. NTC said the responses are weighted to company size and country size in the case of the overall euro zone index and all the numbers are seasonally adjusted. The survey also breaks down the results sector-by-sector on an EU-wide basis and all but two of the 24 sectors covered recorded rises in output per worker in June. The strongest performing sectors in June were in Paper and Forest Products and Metals, Mining and Steel. Laggards last month were again Healthcare and Pharmaceuticals, where readings below 50 showed productivity fell in both sectors in June for the second month running.///