Robert Lind is a European economist with 30 years of industry experience. In this interview, Robert offers his increasingly optimistic view on the economic prospects for the euro zone, interest rates and European markets over the next 12 to 18 months.
Q: What’s your outlook for the European economy?
A: We are starting to see a very significant pickup in European economic activity and I think it’s only partially being recognized by investors. Over the past few months, some extraordinary macroeconomic indicators have emerged and they’ve surprised just about everyone, including me.
The manufacturing activity (PMI) numbers that were released at the beginning of January are simply off the scale, as far as Germany and the euro-zone aggregate are concerned. They are now at their highest levels on record. In addition, the latest economic sentiment indicators – which combine manufacturing, retail, services and consumer confidence into a single confidence measurement – are now close to the cyclical highs that we saw in the mid-2000s.
This encouraging data, along with a few other key indicators, have led me to believe that the consensus view on Europe — that growth is about to roll over — could well be wrong this year, just as it has been wrong over the past couple of years. It’s entirely possible that we could see another surprise in 2018 and euro-zone growth may be much stronger for longer. For instance, in my view, euro-zone GDP growth could be close to an annualized 3% rate in the first half of 2018.