Manufacturing weakened considerably in the last two years in the Eurozone, as a result of the trade tensions. In the last several months we have seen a slight improvement and today’s report showed further improvement, although manufacturing still remains in contraction in Europe, apart form the UK. Below are the final manufacturing numbers for February:

• Italy February manufacturing PMI 48.7 vs 49.0 expected
• Initial reading for February was 48.9
• Switzerland February manufacturing PMI 49.5 vs 48.0 expected
• Initial reading for February was 47.8
• France February final manufacturing PMI 49.8 vs 49.7 prelim
• Germany February final manufacturing PMI 48.0 vs 47.8 prelim
• Eurozone February final manufacturing PMI 49.2 vs 49.1 prelim
• UK February final manufacturing PMI 51.7 vs 51.9 prelim

So, the trend looks good, albeit it is too slow. But, this is still before the coronavirus. Life has changed and will likely change further in Europe, as the virus is spreading in the continent.

Over the weekend, we saw Chinese manufacturing and services take a deep dive and fall to the lowest level ever recorded. A similar scenario is expected in Europe, although probably not as severe, but enough to send manufacturing deeper into recession.