Euro-zone consumers yet to join the recovery

While euro-zone activity indicators suggest that the region’s recovery has picked up speed a bit in the early months of 2014, growth remains worryingly unbalanced. For now, exporters appear to be coping with the strength of the euro exchange rate – export volumes increased by 1.2% in Q4 and survey measures of export orders remain firm. But there is little sign as yet of the pick-up in consumer spending needed to broaden and strengthen the upturn – household spending increased by just 0.1% in Q4. Until households feel confident enough to open their wallets, doubts over the sustainability of the recovery will persist.