Europe PMI slumps

It looked for a couple of months as if the European economy had stopped falling.  But the latest preliminary ("flash") PMIs for Europe, France and Germany show that the descent re-started in July.

The first chart shows the PMI for Europe plotted against the year-on-year change in industrial production (IP).  As you can see, there's been a bit of a rebound in IP.  However, IP is only available with a delay, so the PMI, which is up to date, provides a useful pointer to what's happening out there in the real economy.  Which means IP will probably start sliding again.

This renewed weakness was especially severe in Germany, the economic heart of Europe, and all aspects of the survey were much worse: new business, new export business, outstanding business, employment, and confidence all slumped.