Europe Emerges From Recession
First Economic Growth Since Late 2011
Spurred on by economic strength in Germany and France, Europe officially emerged from a recession in the second quarter, boosting optimism among ad specialty firms there. Economic output among the 17 European Union countries grew by 0.3% in Q2, the first quarterly jump since the Eurozone fell into recession in late 2011.
"The moment of recovery has arrived, which is good news in several aspects," said Hans Poulis, president of the European Promotional Products Association. "What we'd all like to see is a change of mindset from the customer, that trust will return and people will spend money again."
Poulis still expects overall sales of ad specialty firms in Europe to contract slightly in Q3, although he expects positive numbers before the end of this year. "Recovery will start in Q4," he told Counselor. "We are receiving signals that promotional products are getting in a better position in the marketing mix."
Michael Freter, managing director of Europe's Promotional Product Service Institute, agrees that the outlook for promotional products across the continent is improving, although he admits the recovery won't be quick.
"The first half of 2013 was bad, with revenue declines above 10%," he said. "Southern Europe's business does not really exist. The second half of 2013 should become better. Stronger products are the ones below five euros. Especially sweets are doing better. The forecast for 2014 is difficult, but the booking situation of the PSI show, which is also a trend barometer, is looking positive."
The recession in Europe lasted six quarters, the longest down period since the euro currency was launched in 1999. The Eurozone's annualized growth rate of 1.3% still trails that of the U.S. economy, which economists believe is expanding by 1.8%. Still, Europe's emergence from recession marks the first time in about two years that all of the world's major economic regions are growing.