Business investment rate nearly stable at 20.6% in the euro area

The euro zone’s doggedness showed up again in the latest quarterly European sector accounts released by Eurostat, the statistical office of the European Union, and the European Central Bank. From January to March of 2012, compared with the last three months of 2011, the business investment rate remained nearly stable in the euro area and fell slightly in the wider European Union.

Also, the business profit share even rose slightly in the euro area, as wage costs remained stable while value added increased slightly.

In the first quarter of 2012, the gross investment rate of non-financial corporations was 19.9% in the EU, compared with 20.1% in the fourth quarter of 2011.

Investment rate of non-financial corporations (seasonally adjusted)

In the euro area, the investment rate was 20.6% in the first quarter of 2012, compared with 20.7% in the previous quarter, as investment decreased (-0.6%) while gross value added recorded a moderate increase (+0.2%). Total stocks (materials, supplies and finished goods) fell slightly for the second quarter in a row.

In the EU, the gross profit share of non-financial corporations was 38.1% in the first quarter of 2012, compared with 37.8% in the fourth quarter of 2011, Eurostat said.

Profit share of non-financial corporations (seasonally adjusted)

In the euro area, the profit share was 38.3% in the first quarter of 2012 compared with 38.2% in the previous quarter, due to compensation of employees (wages and social contributions) plus taxes less subsidies on production remaining stable while value added rose (+0.2%).