The Eurozone Is Losing Steam

The Eurozone Is Losing Steam
Carl Hazeley

over 1 year ago1 min

Things aren’t looking good for the eurozone economy: manufacturing industry activity and services industry activity – as tracked by the “composite purchasing managers index (PMI)” – fell to their lowest combined level in 16 months in June.

More precisely, the services industry (blue line) was at its weakest in five months, which suggests inflation is putting the brakes on consumer spending. But it’s the manufacturing slowdown that’s really taking its toll: activity in the industry (black line) actually shrank for the first time in two years, as indicated by a reading below 50 on the chart.

As for where to point the blame, look no further than Germany: the manufacturing powerhouse has been hampered by supply chain issues and lockdown-driven disruptions in China.

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