Euro Area Business Cycle Dating Committee

Data sources

October 2015 – Euro area out of recession, in unusually weak expansion

The CEPR Euro Area Business Cycle Dating Committee, which is composed of nine CEPR researchers, establishes the chronology of recessions and expansions of the eleven original euro-area member countries plus Greece for 1970-1998, and of the euro area as a whole from 1999 onwards.

The Committee released its new findings on 1 October 2015. They reflect data publically available as of 15 September 2015. The committee declared that the trough of the recession that started after the 2011Q3 peak has been reached in 2013Q1. The trough signals the end of the second recession witnessed by the euro area after the financial crisis. The recession lasted six quarters; the 2011Q3-peak to 2013Q1-trough cumulative decline in output has been a mild 1.5 percent.

The trough heralds the onset of a euro area expansion; any subsequent decline in economic activity will constitute a new recession. The expansion since the 2013Q1 trough has been, so far, unusually lacklustre by historical standards. Whereas the average GDP growth rate in the nine quarters following a trough was 5.7 percent in the past recoveries, it has been only 2.7 percent since 2013Q1. Similarly, nine quarters into the expansion, labour markets still show considerable slack and employment creation has been very sluggish, in line with the very slow recovery of output. In spite of these enduring signs of weakness, the economy has improved long enough by now and delivered sufficient cumulative growth for the Committee to decide that 2013Q1 marks the trough of the recession that started after the 2011Q3 peak.

At its previous June 2014 meeting, the Committee expressed concern that the euro area may have been experiencing a pause in the recession since early 2013 rather than an expansion. At the time, it observed that the euro area had witnessed, since early 2013, a prolonged episode of extremely weak growth in economic activity. The Committee noted that had the improvement in economic activity been more significant or more sustained, it was likely that it would have been declared a trough in the euro area business cycle in early 2013. The committee released its findings on 16 June 2014. The decision of the Committee not to call an end the recession that started after 2011Q3 in spite of several quarters of positive (but weak) economic developments in the euro area illustrates that its identification of peaks and troughs does not follow a mechanical two-quarter rule for GDP (see FAQ). 

Chronology of Euro Area Business Cycles

The Committee has identified te peak and trough quarters since 1970:

Table 1. Peaks and Troughs

Date Peak/Trough Announcement Date Findings
2013Q1 Trough 1 October 2015 Available here
2011Q3 Peak 15 November 2012 Available here
2009Q2 Trough 4 October 2010 Available here
2008Q1 Peak 31 March 2009 Available here
1993Q3 Trough 22 September 2003 Available here
1992Q1 Peak 22 September 2003 Available here
1982Q3 Trough 22 September 2003 Available here
1980Q1 Peak 22 September 2003 Available here
1975Q1 Trough 22 September 2003 Available here
1974Q3 Peak 22 September 2003 Available here

Therefore the euro area expanded until 1974. Since then there have been four complete cyclical episodes (recession followed by expansion) and it is too early to tell whether the recession that started after the third quarter of 2011 has ended.

Quarters of recession are indicated in grey, and quarters of expansion in white in the figure below. The source spreadsheet of this chronology is available here.

Note: CEPR Recession shading for quarters follows the trough method used by FRED to compute NBER Recession Inndicators for the United States (see here). It shows a recession from the quarter following the peak through the quarter of the trough (i.e. the peak is not included in the recession shading, but the trough is).