The Rising Influence of Rising Affluence

[wow_happens28]

Worse than China's PMI, Europe shrinks too.

The world is connected, I just hope "The Boyz" got somthing good planned.

http://www.marketwatch.com/story/pmi-data-underline-euro-zone-recession-fears-2012-01-02?link=MW_latest_news

FRANKFURT (MarketWatch) — Manufacturing activity across the 17-nation euro zone shrank for a fifth month in December, according to survey-based data released Monday, underlining worries that the sector may have fallen back into recession as the debt crisis deepened.

The final December reading of the Markit purchasing-managers index for the manufacturing sector rose to 46.9 from a 28-month low of 46.4 in November, matching an earlier estimate. The figure indicates activity continued to contract in December, but at a slower rate than in November.

A reading of less than 50 indicates that manufacturing activity shrank, while a reading of more than 50 signals expansion.

“Euro-zone manufacturing is clearly undergoing another recession,” said Chris Williamson, chief economist at Markit. “Despite the rate of decline easing slightly in December, production appears to have been collapsing across the single-currency area at a quarterly rate of approximately 1.5% in the final quarter of 2011.”

The figures confirm that manufacturers within the euro zone are “finding life extremely challenging as domestic demand is hit by tighter fiscal policy across the region, squeezed consumer purchasing power, and heightened euro-zone sovereign-debt tensions, leading to tightening credit conditions and financial-market turmoil,” said Howard Archer, chief European economist at IHS Global Insight.

The euro /quotes/zigman/4867933/sampled EURUSD +0.31% traded at $1.2954 versus the dollar, down from $1.2996 in North American trade late Friday. Overall activity was thin, with London and U.S. markets closed.

Specific readings
For the second month in a row, all nations covered by the survey reported a decline in output. Germany (with a manufacturing PMI of 48.4), France (48.9), the Netherlands (46.2) and Austria (49) all saw modest contractions, with PMI readings rising slightly but remaining below the 50 level.

Italy (44.3), Spain (43.7) and Greece (42.0) suffered sharp contractions.

Meanwhile, all countries covered by the survey reported steep contractions in new orders and new export orders, Markit said.

Williamson said it was particularly worrying to see new orders falling at a far faster rate than output. That indicates firms have relied on orders placed earlier in the year to sustain current production levels, he said.

“This is particularly evident in Germany, and suggests that operating capacity will be slashed in coming months unless demand revives,” he said.

Employment fell slightly for a second month, with increases in headcounts in Germany, France and Austria offset by job cuts elsewhere, the survey found.
/quotes/zigman/4867933/sampled Add EURUSD to portfolio EURUSD USD/EUR 1.2975 +0.0040 +0.3093% Volume: 0.0000Jan. 2, 2012 11:12p
William L. Watts is a reporter for MarketWatch in Frankfurt.