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Keith Knutsson Discusses the Positive Economic Results of Europe That Has Quietly Exceeded Expectations

March 28, 2017

Positive data including higher growth rates and lower unemployment for the Eurozone highlights the strength of the Euro bloc. Current economic measures recently provided a positive surprise during the start of the year, as business confidence proves strong in spite of Brexit.

 

According to the Financial Times, “The eurozone economy has now posted 14 consecutive quarters of growth, the unemployment rate has returned into single digits, and economic sentiment has reached its highest level in six years. The numbers contrast with common depictions of the eurozone economy as stagnant, sclerotic and perennially underperforming.” The final Markit Eurozone PMI® Composite Output Index, measuring managers’ confidence has signaled expansion for the 43rd consecutive month. Job development and rate of output growth continue to rise to record numbers. The chief economist of Unicredit, Erik Nielsen, stated: “I certainly continue to be amazed by the skewed negativism towards Europe.”

 

Analysts are providing insight on the strong economic performance shown by the Eurozone. Perhaps the effects of the decade-old financial crises have finally settled and the European Central Bank’s loose monetary policy is taking effect, encouraging households and companies to borrow and spend more. Domestic demand in Europe is the driving force of recent economic growth.

 

As a result of large economic improvements, the European Central Bank will continue to allow the economy to expand for the purpose of boosting inflation and reducing unemployment. Europe’s central bank’s strategy is slightly different than the U.S., who’s aim has been to continue to gradually increase interest rates. The difference in central bank policy has been another pivotal factor of economic performance on the European continent.

 

“These stronger than expected European economic results can be seen in the real estate market,” stated Keith Knutsson of Integrale Advisors. According to the PWC (Price Waterhouse Cooper) and ULI (Urban Land Institute) report, “While there is a general post-Brexit slump in sentiment towards the UK, investors continue to see value in real estate across many parts of the rest of Europe.” The report emphasizes Germany, considered the new haven for real estate investment. As of 2017, ULI predicts the five leading European cities for overall investment and development prospects are Berlin, followed by Hamburg, Frankfurt, Dublin and Munich. Looking to the future, there are various factors that will influence the real estate sector and the property cycle; supply, occupation, ownership, and investment. The real estate industry in Europe is undergoing robust growth, quietly outperforming its U.S counterpart.

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