Industrial production in Europe has been one of the weakest parts of the world economy over the past 12 to 15 months. In the Euro Zone (i.e excluding Poland and the UK) production fell by 5% between November 2022 and October 23 and is still near the trough. (Over the same period IP was roughly flat in the UK and Poland and down 1% in the US.)
Recently though, sentiment about European growth has improved somewhat, PMI Manufacturing new orders have bounced (from 39 to 46); service sector PMI New Business readings are also up quite sharply from their low, and above 50 for the first time since June 2023. Upward earnings revisions (1-year forward) net upwards earnings have recovered from minus 31% in January this year to -7% currently. ,
Our weekly index of European Industrial Activity (composed of German Truck Tolls, Industrial Sales Forecasts and Manufacturing PMI New Orders) suggests that Eurozone IP may have indeed finally stabilised, but does not point to outright growth as yet.
