Europe's recovery

For the most part, PMIs tend to move more or less in line with business confidence.  This particular business confidence survey just covers industry, like the PMI (there is also a services PMI, not shown).  Like the PMI, the business confidence index is a weighted average of several survey results:  production trends, order books, export order books, stocks, and production expectations.   The PMI uses slightly different surveys, is taken at a different time of the month, and different weights, so one would expect to see some differences.  

But the PMI is rising strongly and is almost above the 50% "recession line", while business confidence had started to rise, but fell sharply in June.    So which should we believe?   The PMI includes employment, whereas the business confidence index does not.   But the employment subsector of the PMI also fell in June, though only slightly.  So that can't explain the divergence.  

Some other clues.  Euro Area (countries which use the Euro currency) industrial production picked up over the last year to March, but fell in April, probably because of Trump's tariffs.   The volume of retail sales in the Euro Area fell sharply in May, after recovering over previous months.

My perspective is that Europe has indeed started to recover, but the tariff mess has paused the recovery.  

The EU makes up about the same percentage of world GDP as the US does, around 22%.  If, as I think, the US goes into recession and the European recovery falters, a global recession will be inevitable.