Manufacturing Remains in Contraction in Europe

Most of the manufacturing reports from across the globe have been released today. Despite a small improvement, it remains in contraction

Written by: Skerdian Meta • Thursday, August 1, 2019 • 1 min read

• Last updated: Thursday, August 1, 2019

Manufacturing is the most affected sector by the global trade war

Today is a manufacturing day as the manufacturing reports get released for most of the developed economies. Manufacturing data takes extra importance now that this sector is in great difficulty across the globe. Manufacturing has fallen into recession in Europe, since the PMI indicator has been coming below the 50 level throughout the year.

In China and the UK, manufacturing is not in recession yet, but it has been in contraction for a couple of months, so it is heading there. Most of the manufacturing reports have released, so you can take a look for yourself at the table below:

Manufacturing PMI Data	Actual	Expected	Previous
Spanish Manufacturing PMI	48.2	48.1	47.9
Italian Manufacturing PMI	48.5	48	48.4
French Final Manufacturing PMI	49.7	50	50
German Final Manufacturing PMI	43.2	43.2	43.1
UK Manufacturing PMI	48	47.7	48
Eurozone Manufacturing PMI	46.5	46.4	46.4

Most of the numbers from the manufacturing table above are green, which means that they either came above expectations or above the previous month. Either way, they all show that manufacturing is still in recession/contraction. Manufacturing fell into contraction in France in June and in July it has fallen into contraction again.

So, everything looks pretty bad, especially regarding German and Eurozone manufacturing which are in deep recession and experienced the fastest decline in 6 years. This should leave the ECB quite dovish and keep the Euro subdued, especially EUR/USD after yesterday’s meeting from the FED which was not as dovish as markets might have been expecting. UK manufacturing experienced the biggest output decline in 7 years, which means that the Bank of England should remain pretty dovish as well today.

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.