European corporate earnings are at a turning point, according to Nomura, which predicts that European firms are set for significant profit growth in the coming year.
The Japanese investment bank has based its view on five industry-specific indicators which all point to a recovery for European companies next year. New light vehicle registrations, Frankfurt airport cargo volumes and the European hotel occupancy rate have all been taken into account, along with global crude steel production and oil and gas rotary rig count. Analysis of these five indicators gives the bank reason for optimism.
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Nomura argues that light vehicle registrations, compiled by European Automobile Manufacturers' Association, offer the best clues on the outlook for the manufacturing industry (see graph below).