There's still signs of a spark in the old dog yet
Europe's manufacturing isn't breaking any records. With just a few exceptions it remains in expansion. Out of the big cheeses, France remains in contraction while Germany and Italy have expanded
Greece has sunk further into the mire with manufacturing falling to 30.2 from 46.9
European manufacturing PMI's
Do exports matter to European manufacturing?
That depends on how you look at it. When we look at the growth of a country there's two parts. Domestic and export. Domestically a country can produce decent growth but that only gets you so far. The UK is a great example of a recovery led by domestic demand. The issue comes is when that demand goes as far as it naturally can, then you need to see exports pick up to help take the next step
In that sense Europe, and more so the Eurozone, is unique. While it is made up of individual countries the essence of the Eurozone is that it is one unit, and the whole thing can be seen as one big domestic market. If German manufacturing picks up there's a good chance that it bought materials from other countries in the Eurozone and so we see the knock on effect
Exports from Europe could stay weak, as they are with other countries, but domestically a small pickup can have a big effect across the whole of Europe. Europe could well benefit more from a domestic recovery than having to worry about selling abroad as it is a one-stop-shop for every country within it. If things improve Europe stands to be better placed to benefit domestically than many other countries, including the US and UK. As always though, there's a big emphasis on "IF"
