As was the case elsewhere, the strong gains in euro area business confidence, from last  2  BIS Review 18/2004  summer onwards, suggested that growth was going to gather momentum. While third quarter data seemed to confirm that recovery was taking hold, activity was being driven by a solid pick-up in exports, with domestic demand remaining weak.
Notwithstanding the rise in the value of the euro, the stimulus from a more strongly growing global economy was driving euro area growth. The scenario which appeared to be unfolding at that stage was one where stronger export growth would generate a recovery in production. This would stimulate investment and would be followed, in turn, by a pick-up in consumer spending.