Recent data suggests that Germany is leading the way towards a
stronger euro zone. That is good news for Germany's exchange traded
), which is down about 3% year-to-date. But the question remains
whether the economic momentum can be carried into the future.
According to William L. Watts of MarketWatch
, the European Commission's economic sentiment indicator rose to
101.3 last Thursday, putting it above its long-term average of
In addition, the consumer confidence index rose to -14 from -17,
the industry confidence index rose to -4 from -6, the services
index rose to 6 from 4, the retail trade index rose to -4 from -6,
and the construction index rose to -29 from -30.
Employment figures for Germany have also looked brighter.
Germany's unemployment rate edged down 0.1% to 7.6%, while its
seasonally adjusted number of unemployed people declined by
With its strong recovery, some people are concerned that there
will be a shortage of skilled workers,
reports Monsters and Critics
. Underscoring that concern is the 31.3% surge in job vacancies
over the last month in Germany.
All this suggests that Germany, which is the largest economy in
the euro zone, may be leading the euro zone out of its financial
mess. However, Martin van Vliet of ING Bank in Brussels thinks,
"with global growth momentum showing signs of slowing and domestic
demand still lackluster, the euro-zone recovery is bound to lose
steam in the second half of this year."
On the automobile front,
the Economic Times reports
that luxury brand automakers reported strong earnings. BMW posted
Q2 net profit of 834 million euros, compared to 121 million euros a
The results shattered analyst expectations, and Chief Executive
Norbert Reithofer said manufacturing would run at 90% capacity this
Although Daimler raised its earnings outlook and Volkswagen is
on pace to sell a record 6.3 million vehicles, Peugeot head
Philippe Varin warned that for the rest of the year "the economic
context is clearly going to be less favorable than in the first
For those who think Germany can continue to grow and lead the
euro zone out of its recession should take a look at
iShares MSCI Germany Index Fund (NYSEArca: EWG)
For more stories on Germany, visit our
Sumin Kim contributed to this article.