Indicator provides further evidence of gradual recovery in euro area economy

The latest developments within the euro area economy according to €COIN, the monthly coincident index of the euro area business cycle released on the 28^th of each month by CEPR

• The rate of economic growth in the euro area continued to rise in January reinforcing the positive signal given by €COIN for December 2001.

• Firmer signs of growth – In common with the figure for December 2001, the rise in the indicator is driven by the survey data on consumer and business expectations, financial variables (such as interest rates) and some labour market variables. The industrial production component of the indicator has continued to fall in January 2002 though less than in December 2001.

• Between December 2000 and November 2001 €COIN fell and become negative in September 2001 for the first time since the end of 1995. In December 2001 the indicator showed an upturn, which is now confirmed by the figure for January 2002. However, despite two consecutive months of positive signals the value of the indicator has not yet risen above zero in 2002.

• In August 2001, there were already signs that economic activity had levelled off after falling throughout the first half of 2001. The effects of September 11th led to a sharp fall in euro area growth in the months following the attack, prolonging the recession and delaying the first indications of positive growth until December.

• For the period since October, the indicator is based on partial and preliminary data and so must be interpreted with caution. The latest figure, for January 2002, is based on a limited dataset and must be interpreted with particular caution. It should be noted that the revision for December, November, and October, due to arrival of new data, is very small.

Notes for Editors:

CEPR is a network of over 550 Research Fellows based throughout Europe, who collaborate through the Centre in research and its dissemination. CEPR helps its Research Fellows to develop projects, obtain their funding, administer them and disseminate their results. The Centre’s research ranges from open economy macroeconomics to trade policy, from the economic transformation of Central and Eastern Europe to regionalism in the world economy.

Who produces the Indicator? EuroCOIN is published on the 28^th of each month by CEPR and constructed by a team of academic researchers associated with CEPR.  The team comprises: Filippo Altissimo (Banca d'Italia and CEPR), Antonio Bassanetti (Banca d'Italia),Riccardo Christadoro (Banca d'Italia), Mario Forni (Universita di Modena and CEPR), Marc Hellin (ECARES, Universite Libre de Bruxelles), Marco Lippi (Universita di Roma), Lucrezia Reichlin (ECARES, Universite Libre de Bruxelles and CEPR), Giovanni Veronese (Banca d'Italia)

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For more information: http://www.cepr.org/data/eurocoin