Not good but seriously folks…..

Europe is at the epicentre of a global manufacturing slump, according to a closely watched survey that showed the bloc’s two biggest economies are struggling to remain competitive.

Activity in Germany’s key manufacturing sector fell to its lowest level in two years amid soaring energy costs that continue to push up prices. Last month, the Kremlin announced an indefinite shutdown of the key Nord Stream 1 gas pipeline that links Russia to Germany, which drove a spike in prices.

Germany’s manufacturing activity fell to 47.8 in September, from 49.1 the previous month, according to the S&P Global PMI, taking it further below the 50 level that divides growth from contraction.

The PMIs – yes, that means shrinking. But it’s not a slump. That’s a shaving off, not a slice and certainly not a chunk.

Slumps are when PMIs get down into the 30s……

12 thoughts on “Not good but seriously folks…..”

  1. Now we enter the realms of philosophy, where shaded definitions of words count more than do the things that really matter. Sam Hain currently tops the one day batting averages at 58.54. If over the last ten matches his average dropped to 40, which would still put him in the list of the top one hundred of all time, I think that he would regard it as a slump. Your statistic of 47.8 is only meaningful in any sense when it is compared to previous numbers. If it had previously been 45 I think that most commentators would regard that as being on the up. One man’s, sorry person’s slump is another person’s not at all unhappy with.

  2. Soprta and maybe. These numbers are deliberately constructed so that 50 is the dividing line between expansion and contraction. 49.9 means contraction, 50.1 expansion…..

  3. The gas shortages haven’t properly hit German industry yet. The end of this month should see some proper contraction.

    Also what happens when Credit Suisse and Deutsche Bank go under ? I guess DeBa has been priced in, seeing as it has been on the brink for the last dozen years…

  4. I’m a bit behind, but I thought the German government was talking about a gas “price brake” to protect industry?

    Germany’s Big Idea was to introduce a new tax on energy bills to protect energy companies at the expense of consumers (imagine the screeching if the Tories did that here!)

    They now need a “price brake”, in part because of the price levy. YMMV, but I’m not confident robbing Dieter to pay Paul is going to solve Germany’s lack of critical supplies.

    Last week’s usage of natural gas by German households and small industry was 483 gigawatt hours, 14.5% above the average for that week over the past four years, the Federal Network Agency said.

    Ruh roh.

  5. Well, at least the Septics have removed any ambiguity about the potential resumption of Russian gas supplies.

  6. The Germans have abandoned the tax on energy bills, and cut VAT on gas from 19% to 7%. I think they’ve temporarily nationalised some suppliers to protect them. German gas reserves (the fourth largest in the world) are at over 90% capacity and rising. So long as the interconnects keep running, Germany should cope this winter. They’ve kept two nukes online, and they’ve said they might not export electricity to France – which is unlucky for them as they’ve lots of their nukes shut down for major maintenance.

    Not sure about the UK, though. Our National Grid was filling up the German tanks but not ours, so now they’re looking for gas. In October.

    . . . at least the Septics have removed any ambiguity about the potential resumption of Russian gas supplies.

    One of the four Nord Stream pipes is still functional.

  7. Last week’s usage of natural gas by German households and small industry was 483 gigawatt hours…
    Unusual to measure gas in GWh, unless part of a comparison among different energy sources. Not wrong, just unusual, although it does lead one to ponder the sometimes tense relationship between journalists and numbers.

  8. For a given value of “functional”…

    I’ve not read of any reason Nord2B couldn’t resume gas flow. In fact, surprisingly little is heard of it, considering the hoo-ha. A hoo-ha that has died down surprisingly quickly.

    If it was sabotage that was meant to be comprehensive, presumably there’s a stack of explosives on the pipeline waiting to be discovered / picked up.

  9. I’ve a suspicion that the Russia Ukraine debacle is now just a handy excuse for the powers that be to blame the result of all their screws ups on so they don’t have to take blame, Biden was blaming inflation on the conflict within hours it seems

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