Asia Trudges Against Headwinds from Europe
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  • Ed Snyder

    And those headwinds aren’t going to slacken anytime soon as long as “European Consumers Tighten Their Belts”:

    “Dour indicators are piling up. French consumers spent 0.2% less in the second quarter than the first, on fewer manufactured goods, the government statistics agency said late last month. In July, consumer confidence across the 17-nation currency bloc fell to its lowest level since 2009, the European Commission said. Consumer spending on goods and services in Western Europe is expected to slip 0.9% in inflation- and exchange-rate-adjusted terms in 2012, compared to a 1.9% increase forecast for the U.S., according to market-research firm Euromonitor International.

    “The tighter purse strings are squeezing multiple industries. At the roughly 180 European-listed companies on the Stoxx 600 index that had reported quarterly earnings by the end of last week, profit was down 12% compared with a year ago, according to new data compiled by Thomson Reuters. Things aren’t expected to improve soon: Analysts have revised their third-quarter estimates for those companies’ earnings down 6.2% in the last 30 days, Thomson Reuters said Friday.

    “Among the biggest shifts is in groceries. For years, European households have spent proportionately nearly double what Americans do on food to eat at home. But higher prices are pushing people in some countries to actually reduce the volume of groceries they buy, analysts say. Overall at-home food expenses per household in Western Europe are expected to drop 2.7% in 2012, according to Euromonitor, as consumers shift to “hard discounters” such as closely held Aldi that offer far fewer products, often their own brands, at cheaper prices.”

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