Hard And Soft Data Align: Germany, France Asleep At The Wheel As Recession Looms

Hard Data and soft both flash huge warning signals for the Eurozone. Few pay attention.

Asleep at the Wheel

I agree with the line of thought by @Halsrethink and @JoshFriedlander. Let's look at the data to see why.

Soft Data France


The IHS Markit France Service PMI shows the Sharpest Decline in Business Activity for Nearly Five Years.

Commenting on the PMI data, Eliot Kerr, Economist at IHS Markit said:

“January data pointed to an even faster decline in service sector activity than in protest-hit December. Output fell at the quickest pace since February 2014, despite the intensity of the 'gilets jaunes' protests easing throughout January. It seems the key driver of the latest contraction was on the demand-side, with panelists reporting a slowdown in orders from clients."

"The results are worrying for a French economy that was propped-up by service sector strength for the majority of 2018. Although the fall in manufacturing production eased in January, a rebound in that sector would not necessarily be enough to support economic growth if the downward momentum in services continued."

Soft Data Germany

The IHS Markit France Service PMI shows Business Activity Growth Ticks up But Inflows of New Work Ease Closer to Stagnation

Commenting on the PMI data, Phil Smith, Principal Economist at IHS Markit said:

"The first acceleration in service sector business activity for four months was good news, although the indication that inflows of new business eased closer to stagnation at the start of the year took some of the shine off the latest results. A steep and accelerated fall in the level of new work from abroad provided evidence of the weakening international demand environment affecting not only manufacturing but also services.

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