The annual growth rate of gross fixed capital formation of non-financial corporations in the euro area increased to 9.3% in the first quarter of 2011, from 6.5% in the previous quarter. The annual growth rate of net entrepreneurial income of non-financial corporations decreased to 10.1% in the first quarter, after 20.5% in the previous quarter. The annual growth rate of financing of non-financial corporations was 2.1% in the first quarter, broadly unchanged from 2.2% in the previous quarter, and the annual growth rate of their financial investment decreased to 2.8 % in the first quarter of 2011 (2010q4:3.2%).
Total euro area economy
The annual growth rate of euro area net disposable income increased to 4.0% in the first quarter of 2011 (2010q4: 2.8%). Euro area gross fixed capital formation increased by 6.7% annually (2010q4: 2.6%), due to higher growth by non-financial corporations and households. The growth rate of gross capital formation4 increased to 11.9% in the first quarter(2010q4: 6.1%).
Total economy investment growth increased in the first quarter of 2011 from the previous quarter. This was largely financed by an increase in general government and foreign saving.
Households
The annual growth rate of households’ gross disposable income increased to 2.4% in the first quarter of 2011 (after 1.6% previously). This increase was due to increases of compensation of employees, net property income and operating surplus and mixed income, offset partly by increases in taxes and net social transfers.
The annual growth rate of households’ consumption expenditure (3.2%) exceeded the annual growth rate of households’ gross disposable income which implied a further decline in gross saving(-3.0% after -8.9% previously). The annual growth rate of gross fixed capital formation of households increased to 5.1% in the first quarter, from 2.4% in the previous quarter. The four-quarter moving average households’ gross saving rate was 13.5% (compared with 14.8% in the fourth quarter of 2010).
The annual growth rate of financing of households decreased to 2.3% in the first quarter of 2011(2010q4: 2.7%). The annual growth rate of households’ gross non-financial investment was 6.0%, up from 3.1% in the previous quarter whilst that of financial investment decreased to 2.6% compared with 2.9% previously.
Turning to the components of households' financial investment, the annual growth rate of their holdings of currency and deposits increased slightly to 2.9% in the first quarter of 2011 (2010q4:2.8%). The annual growth rate of their investment in debt securities increased to 3.9% in the first quarter (2010q4: -0.7%), whilst that of investment in shares and other equity decreased to 0.2% in the first quarter (2010q4: 1.9%). The annual growth rate of households’ additions to life insurance and pension fund reserves decreased to 3.9% in the first quarter (2010q4: 4.4%).
Developments in households’ balance sheets were dominated by valuation changes of their nonfinancial assets. Growth of households’ net worth decreased to 2.9% in the first quarter of 2011 (2010q4: 3.9%). The annual growth rate of the market value of households’ holdings of shares and other equity decreased to 1.5% in the first quarter of 2011 (2010q4: 4.0%) and the annual growth rate of housing wealth decreased to 3.2% (2010q4: 4.1%).
Non-financial corporations
The annual growth rate of net entrepreneurial income of non-financial corporations was 10.1% in the first quarter of 2011, down from 20.5% in the previous quarter. The annual growth rate of net value added was 5,5% (2010q4: 4.4%). Gross fixed capital formation of non-financial corporations increased by 9.3% in the first quarter of 2011, compared with 6.5% in the previous quarter. The annual growth rate of total gross non-financial investment, which also includes inventories, was 17.8%, up from 14.6% in the previous quarter.
In the first quarter of 2011, the annual growth rate of financing of non-financial corporations remained broadly unchanged at 2.1% (2010q4: 2.2%). The growth rate of their loan financing amounted to 2.2%, up from 1.8% in the previous quarter. The annual growth rate of their issuance of debt securities was 4.5% (2010q4: 7.7%). The annual growth rate of their equity financing, via the issuance of quoted and unquoted shares and other equity, was unchanged from the previous quarter at 2.0%.
Financial investment of non-financial corporations increased at an annual rate of 2.8% in the first quarter (2010q4: 3.2%). The annual growth rate of investment in currency and deposits increased to 2.8%, after 2.6% previously. The growth rate of loans granted decreased to 6.9% in the first quarter of 2011 (2010q4: 8.5%). The growth rate of their investment in shares and other equity remained unchanged at 2.0% (2010q4: 2.0%).
Insurance corporations and pension funds
The annual growth rate of insurance technical reserves, the major financing instrument of insurance corporations and pension funds, decreased to 3.7% in the first quarter of 2011, compared to 4.3% in the fourth quarter of 2010. The annual growth rate of their financial investment decreased to 3.0% from 3.7% in the previous quarter. The growth rate of their investment in debt securities decreased to 5.1% (2010q4: 6.3%), whilst that of their investment in shares and other equity decreased to 1.3%, from 2.0% in the previous quarter.
