FRANKFURT (MNI) – There are growing signs that manufacturing
production in the Eurozone is getting back to normal, with investment
levels set to grow, the European Central Bank said in its Monthly
Bulletin published on Thursday.
In its report, the central bank cited business surveys showing that
a growing proportion of firms reported non-demand constraints to
production had increased, while the proportion of respondents blaming
low production on weak demand had fallen.
And the specific non-demand constraints cited indicate that
companies will soon need to make new capital investments.
“This strong increase in non-demand-related limits to production is
mostly attributable to equipment shortages, whereas there have been
fewer reports of labour shortages or financial constraints limiting
production,” the central bank said.
With investment base levels already low, and growing evidence that
firms are likely to boost investment spending in the event that ongoing
equipment shortages hamper output, the ECB projected investment would
pick up, as reflected in the net lending positions of non-financial
corporations over the past three quarters.
“Thus, there are increasingly signs of the production situation in
the manufacturing sector in the euro area getting closer to being back
to normal,” the central bank said.
–Frankfurt bureau; +49-69-720 142; email: frankfurt@marketnews.com
[TOPICS: MT$$$$,M$X$$$,M$G$$$,M$$EC$,M$$CR$,MGX$$$]
