As I've mentioned before, the state of Austria's economy gives a good guide to how the whole of Europe's going. Exports equal 56% of Austria's GDP. If manufacturing is slumping in Austria, it's mostly because Europe is sliding. Compare the difference here with large continental economies like the United States.
After extreme adjustment, Austria's PMI is now lower than during the Covid crash. That's because my extreme-adjustment algorithm regards a downward spike lasting just 2 months as an aberration (outside the 2 sigma limit for the error term, if you want to get technical). Business confidence, which, as you'd expect, correlates reasonably well with the PMI, recovered in December, January and February, paralleling the bump in the PMI, but fell again since then.
I remain convinced that there will be a European recession. We've had a mini bounce in the European economy, and that's now over.
[See also Austria: PMI vs Business Confidence]
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| Click on chart to see a clearer image. |
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