Manufacturers in Europe face the not-so-humorous question: Is it a light at the end of the tunnel, or an oncoming train? A preliminary U.S.-China deal on trade and Boris Johnson’s big win in the British elections ease some uncertainty. But the latest surveys showed a miserable end to the year. Manufacturing activity fell in December in seven of eight countries covered in the survey, the exception being Austria, which was unchanged. Weakest was Germany, with the Netherlands and
Italy hitting 80-month lows. Confidence in the future improved to a six-month high. Consumers were the only bright spot in manufacturing demand. For now, consumers and services are supporting growth in Europe, but for how long? As IHS Markit chief business economist Chris Williamson put it, “the ability of the wider economy to avoid sliding into a downturn in the face of such a steep manufacturing contraction remains a key challenge as we head into 2020.