PMI week: Europe's getting wrecked

If a rising tide floats all boats, then Europe is trapped in a whirlpool.

The manufacturing sector is contracting across Europe, if the latest PMIs are correct. The indices, which measure activity in various sectors through surveys with purchasing managers, are set such that a value of 50 indicates no change; less than 50 shows contraction; and more than 50 shows growth. With that in mind, these numbers do not look good:

  • Spain: dropped to 44.2 in March, from 46.8 in the previous month.
  • France: fell to a seven-month low of 44.5, from February’s mark of 45.8.
  • Italy: inched up to a three-month high of 44.0, from 43.9 in February.
  • Eurozone overall: 46.8, down from 47.9 in February… fell to reach a three-month low and has now remained below the neutral 50.0 mark since August 2011.

The Eurozone's history is stark:

But the most stunning chart is the one which shows the recent history of manufacturing across Europe. It isn't good:

The best possible explanation for this would be that, coming off the back of the great recession and in the midst of a continent wide crisis, Europe is also experiencing a sectoral shift, pushing people out of manufacturing work and into other sectors of the economy. That way, an end is in sight – and it could even be an improvement on where the continent was before.

Unfortunately, that doesn't seem likely. Even Germany is seeing a contraction in manufacturing, and that's hardly a nation we commonly think of as needing a rebalancing away from its great strength. Instead, it just reinforces that the European crisis, even as eyes are focused on Cyprus, is hitting the entire continent. There are still some unbearable differences between nations – the German youth unemployment rate is 7.7 per cent compared to a Greek rate of 58.4 per cent – but if a rising tide floats all boats, then Europe is trapped in a whirlpool, and the fleet's getting wrecked.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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What do Labour's lost voters make of the Labour leadership candidates?

What does Newsnight's focus group make of the Labour leadership candidates?

Tonight on Newsnight, an IpsosMori focus group of former Labour voters talks about the four Labour leadership candidates. What did they make of the four candidates?

On Andy Burnham:

“He’s the old guard, with Yvette Cooper”

“It’s the same message they were trying to portray right up to the election”​

“I thought that he acknowledged the fact that they didn’t say sorry during the time of the election, and how can you expect people to vote for you when you’re not actually acknowledging that you were part of the problem”​

“Strongish leader, and at least he’s acknowledging and saying let’s move on from here as opposed to wishy washy”

“I was surprised how long he’d been in politics if he was talking about Tony Blair years – he doesn’t look old enough”

On Jeremy Corbyn:

"“He’s the older guy with the grey hair who’s got all the policies straight out of the sixties and is a bit of a hippy as well is what he comes across as” 

“I agree with most of what he said, I must admit, but I don’t think as a country we can afford his principles”

“He was just going to be the opposite of Conservatives, but there might be policies on the Conservative side that, y’know, might be good policies”

“I’ve heard in the paper he’s the favourite to win the Labour leadership. Well, if that was him, then I won’t be voting for Labour, put it that way”

“I think he’s a very good politician but he’s unelectable as a Prime Minister”

On Yvette Cooper

“She sounds quite positive doesn’t she – for families and their everyday issues”

“Bedroom tax, working tax credits, mainly mum things as well”

“We had Margaret Thatcher obviously years ago, and then I’ve always thought about it being a man, I wanted a man, thinking they were stronger…  she was very strong and decisive as well”

“She was very clear – more so than the other guy [Burnham]”

“I think she’s trying to play down her economics background to sort of distance herself from her husband… I think she’s dumbing herself down”

On Liz Kendall

“None of it came from the heart”

“She just sounds like someone’s told her to say something, it’s not coming from the heart, she needs passion”

“Rather than saying what she’s going to do, she’s attacking”

“She reminded me of a headteacher when she was standing there, and she was quite boring. She just didn’t seem to have any sort of personality, and you can’t imagine her being a leader of a party”

“With Liz Kendall and Andy Burnham there’s a lot of rhetoric but there doesn’t seem to be a lot of direction behind what they’re saying. There seems to be a lot of words but no action.”

And, finally, a piece of advice for all four candidates, should they win the leadership election:

“Get down on your hands and knees and start praying”

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.