Chart of the day: European PMI & Recession

Here’s a good update on the situation in Europe showing Eurozone PMI’s and GDP Growth.  The latest services reading came in at 46 while the latest manufacturing PMI came in at 45.4.  These readings are consistent with continued recession across the region.

A closer look, however, shows enormous disparity in the underlying data.  For instance, Greece, at a reading of 41 is substantially below the average reading in Europe while Germany’s latest reading of 50 is not even contracting.

Taken as a whole though, it’s still bad news for the whole of Europe.  And the worst part is, it’s difficult to imagine an improving scenario until the flawed currency union is fixed.

(Chart via Reuters)

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Mikael Olsson

    Nit picking: “Europe” and “Euro zone” are not the same.

    Granted, the part of Europe outside the Euro zones is comparatively small, and definitely hugely affected by the Euro zone. Except for maybe Norway. (Oil oil oil)

  • The Dork of Cork.

    This Irish central banker wishes to plug into the Euro 2.0…..

    http://www.centralbank.ie/press-area/speeches/Pages/AddressbyGovernorPatrickHonohantotheDavidHumeInstituteandtheScottishInstituteforResearchinEconomics13November2012.aspx

    This after the Euro 1.0 post 1987 has destroyed Irish society to the point where now it has little internal redundancy and cohesion…..

    This after their Euro 0.5 grossly damaged Irish society in the 1970s causing the mini depression of the 80s.

    Its a great push to destroy what made Europe great – its diversity.
    They want to create another monster state , another USA.

    The ultimate failed market state.

    But why ?

  • Mikael Olsson

    It’s one of the rare cases of supply side economics working: supply (aspiring politicians) creates its own demand (need for politicians) by creating the EU and enlarging its responsibilities.

  • Adrian

    The update is kind of old if you ask me. The flash estimates were released almost a month ago.
    There’s nothing flawed about euro currency. It’s all about indebtedness as well in EU and US. Just that US has a bigger problem in this regard. You will acknowledge this when the US will hit another recession.

  • Mikael Olsson

    There is a MAJOR flaw with the Euro construction and it’s called lack of federal government to directly tax and redistribute as needed between citizens of the member states.

    The USA has this.

    The eurocrats want it too. The bank union is underway. They are hoping for a fiscal union, too.

  • Adrian

    Maybe, but US government deficit is about 7% of GDP AFTER 3-4 years of expansions, almost double of euro zone deficit of 4,1%, which is already in recession and made some adjustments to spending. I predict things will get much ugly in US when the s..t will hit the fan.

  • Mikael Olsson

    I agree that there is a very worrying tendency in the whole modern world. The US is not alone here.

    With our level of productivity we should not have ANY problem providing for everyone even at 20 hour work weeks. The fact that we do not suggests a systemic error.