Growing signs of a recovery in big European economies such as France–which has long been a weak spot in the region–suggest 2016 could be the best year for the region in over a decade, according to one fund manager.
An index of sentiment in France’s industrial sector rose by more than expected to 102 in July from 100 in June, the country’s statistics agency INSEE said on Wednesday, CNBC reported.
It’s the latest sign that hefty monetary stimulus from the European Central Bank, a weak euro and lower oil prices are working their magic in the eurozone, helping provide a strong buffer from turbulence in debt-struck Greece.
“France is the industrial, manufacturing, business confidence laggard of Europe, so to see France turning the corner is very important,” Michael Browne, fund manager at Martin Currie, told CNBC’s “Squawk Box Europe” after the release of the French data.
“It means we have growth in the UK, we have growth in Germany, Italy is clearly turning the corner and now France is coming on board.”
Asked whether it was premature to call a recovery in Europe, which has lagged US economic growth for years, Currie said he saw an improvement in economic conditions in the second half of the year.
“2016, for me, looks like possibly the best year for Europe since 2005,” he added. “It’s been a long wait.”
Economic growth in the 19-member eurozone rose 0.4% in the first quarter, the strongest quarterly expansion since the second quarter of 2013.
Upbeat earnings from corporates in the early days of the second-quarter earnings season also bodes well for Europe’s economic outlook, analysts said.
Danish lender Danske Bank, for instance, on Wednesday reported better-than-expected earnings that sent its shares up more than 5%. Budget carrier easyJet, meanwhile, reported strong profit guidance.
