Euro area economic indicator €-coin registers slight January dip

The Banca d'Italia's €-coin indicator for the euro area registered a slight decline to 0.49 in January, down from 0.52 in December. This performance reflects a softening of positive signals within the service sector, as reported by qualitative surveys.

Euro area expansion holds despite service sector dip

The Banca d'Italia's €-coin, a summary index of the current economic situation in the euro area, fell slightly to 0.49 in January from 0.52 in December.

Despite this marginal decline, the indicator confirms an ongoing phase of cyclical expansion within the euro area.

The performance primarily reflects a softening of positive signals observed in the service sector, as indicated by recent qualitative surveys.

The €-coin is designed to provide an estimate of quarterly GDP growth, stripped of erratic components such as seasonal variations, measurement errors, and short-run volatility, offering a clearer view of underlying economic trends.

It is published monthly by Banca d'Italia in collaboration with the Centre for Economic Policy Research (CEPR), serving as a crucial tool for real-time economic assessment.

Real-time economic pulse for the euro area

The €-coin indicator is meticulously constructed each month by exploiting a vast set of macroeconomic time series, such as industrial production indices, business and household surveys, demand indicators, and stock market indices.

This extensive data allows for the precise extraction of information needed to estimate the underlying trend of euro-area GDP growth.

Crucially, €-coin provides an early indication of this trend, preceding the official euro-area GDP figures released by Eurostat by several months.

This early signal is net of erratic or short-term components, offering a clearer, real-time snapshot of economic activity.

A new version of the indicator, with revisions to its database and estimate sample, has been published since January 2021 to enhance its accuracy and relevance.

A steady pulse, not a tremor

While the slight dip in €-coin for January is notable, it does not fundamentally alter the confirmed outlook for cyclical expansion.

The indicator's strength lies in its ability to filter out noise, providing a robust, early read on underlying GDP trends.

For policymakers, this consistent, forward-looking data remains invaluable for timely economic assessments, even if monthly fluctuations are minor.