Austria's PMI for June continues to slide deeper into recession territory. (The June PMI for Europe in the chart is provisional ("flash") and may be revised.)
In the chart below, I have extreme-adjusted the original data. This reduces the downward spike of the Covid crash at the beginning of 2020. Strictly speaking, both Europe's and Austria's PMIs fell to deeper lows during the crash than where they are now, but that downturn lasted for just 2 months. The GFC downturn lasted for nearly a year. So my extreme-adjustment program reduces the Covid crash decline, but not the GFC and not the current decline. Both series are now well below the 50% "recession line".
It is important to remember that it is Europe driving Austria's economy, not the other way round. Austria's weakness is because Europe is slipping into a deeper recession.
The ECB (European Central Bank) will probably raise rates again. It is clear to me that they have raised rates by more than enough, but it may not be clear to them. The economy takes time to respond to changing interest rates, and its response to the rate increases which have already occurred is not yet over.
As in US data, we have seen a little uptick earlier this year as services grew because of pent-up demand after Covid. But that uptick has faded. Recession is deepening.
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