Europe Economy

Europe at a turning point: This chart shows why

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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.

(Read More: European equities looking cheap as recession eases)

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).

With over 70 percent of freight in Europe carried by trucks and light commercial vehicles, any pickup or drop-off in activity in the region is immediately borne out in this data, it said. The graph shows that the overall relationship with European corporate EPS (earnings per share) estimates is generally solid and Nomura sees the data "bottoming-out" and an upward trend appearing.

Nomura has a "high conviction" that we'll start to see this a turnaround in the second half of 2013.

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It forecasts earnings growth of 14 percent for 2014 and 2 percent growth for 2013..

This new forecast comes at a time when the euro zone continues to show promising signs of "green shoots". Markit's flash purchasing managers' index (PMI), measuring business activity in the euro zone, grew faster than forecast in September and has boosted hopes for the region's economic recovery.

(Read More: Surge in Europe Equity Flows Has Some Worried)

Michael Browne, fund manager at Martin Currie believes more analysts will now join Nomura with bullish predictions for profit growth ,with fresh data confirming a "self-sustaining recovery" on the continent.

"What I see, with very few exceptions, is significantly improving demand, production and profitability from the corporate sector within Europe," he told CNBC.

By's Matt Clinch. Follow him on Twitter @mattclinch81