European IP Still Mixed Across Early Reporters

The overall assessment of EMU-wide IP is not yet possible. But a slew of early reporters (eight in this table) along with two northern European countries have issued reports on manufacturing production in February. They are mixed in February with four up, and four down. January has five ups and three downs. December has five down and three up. So, the numbers cluster around 50-50 with some variation. The Northern European countries are showing monthly gains except for Norway in December.

The sequential trends showing growth rates over three months, six months, and 12 months, show three EMU nations with output falling and five increasing over three months, then four have output up and four down over six months. Over 12 months, five countries have output down and three with output up. The sequential growth rates do show a trend toward having more nations with expanding output. Germany, Finland, and Greece show decline on all three horizons. France shows output declines over six months and 12 months while Spain shows a decline only over 12 months. The northern European countries of Sweden and Norway log increases on all horizons.

From 12-months to 6-months to 3-months, the EMU median reading steadily progresses to a stronger reading. The median change at an annual rate is -0,7% over 12 months, -0.3% over six months and +3.0% over three months. Monthly data do not give a ‘clear look’ at trends. In December, the median output change on month-to-month data is -0.7%, which shifts sharpy to a gain of 0.9% in January. February saw the median also post an increase, a bit weaker than January at 0.3%. Still, it was an increase, and it was better than the December rate of -0.7%.

Globally economic conditions are mixed and now confused in the wake of massive U.S. tariffs imposed and then rescinded by the U.S.- except for the even larger tariffs the U.S. put on Goods from China. Even with the large Trump reciprocal tariffs removal, a blanket tariff of 10% has been installed.

There is a 90-day pause placed on imposing the massive so-called reciprocal tariffs. The Trump Administration has told us they have been approached by a number of countries to engage in tariff negotiations. The tariff pall may be in the process of being lifted, but the global economy is still in a zone of uncertainty. Between the aggressive U.S. global trade effects and attempts to stop the war in Ukraine as well as shifting the responsibility for Europe’s defense more to Europe, there is a swirl of changes that particularly ensnarled Europe. The greater burden for its own defense should provide stimulus to Europe.