Supply chain disruptions continue to hamper Europe, diversified industrial companies with revenue crimped by semiconductor shortages and longer shipping times. Fitch Ratings sees this as a short term event with demand strong, and likely to continue
The European was much weaker at the end of 2019 than many believed. Eurozone December construction output -3.1% vs prior +0.7% m/m and -3.7% y/y from the prior +1.4%. Significantly this is before the Coronavirus outbreak
German manufacturing PMI fell to it’s lowest point in 7 years as the global trade war and Brexit drama weighed. Job creation slowed to its weakest since April 2015 with reduction in backlogs and lower confidence towards future output. /p>
French manufacturing output fell back into contraction in July, overall France saw modest growth driven by the service sector with an expansion in business activity for the fourth month in a row.
Germany manufacturing PMI came in like most European PMIs, soft as the global trade war and Brexit drama weighed. 45.0 was a 4-month high, but still the manufacturing sector contracted for a sixth month in a row. Growth in consumer goods was the brightspot.
Right on the heels of Matteo Salvini’s Lega party winning over 30% in the European elections sources say the European Commission is considering proposing a 3.5 billion-euro ($4 billion) penalty on Italy over its failure to reduce debt per EU budget rules.
The European services sector strength contrasts with weak manufacturing conditions. Growth was led by Germany and Spain. Suggesting that the domestic economies aren’t as burdened by the global trade war and Brexit drama. Resilient rate of growth that has lost some momentum.
European manufacturing PMIs were mostly soft as the global trade war and Brexit drama weighed. Germany and Italy were notable contributors to the stronger decline. Netherlands and Spain the only two over 50.0
Industrial production continues to slide Eurostat reports, falling 1.7% more than the 1.5% fall expected, this is prior to the market turmoil of December and just at the start of Gilets Jaunes protests which are now in their ninth week. Last month was +0.1%; revised from +0.1%.
The European Central Bank (ECB) latest forecasts show slightly higher growth this year but lower inflation in 2019. President Draghi in the opening of his statement talked about stronger growth in the ECB to 2.4% from 2.3%.