Han de Jong, the chief economist at ABN AMRO, thinks Eurozone’s industrial sector is in a bad way, particularly in Germany.

• “The dominance of the car and machinery industry has meant that the German industrial sector is sensitive of the global slowdown of investment spending and car purchases, on top of specific problems for the car industry related to Dieselgate. German industrial production fell 1.5% mom in June and was down 5.2% yoy, after -3.7% in May. That was the worst reading since 2009 and, thus, worse than the Eurozone second-dip recession around 2012.
• German factory orders did better as they rose 2.5% mom in June. The yoy rate improved from an appalling -8.4% to -3.7%. It must be said, however, that the improvement in orders was not broadly based, but seems to have been helped by a small number of lumpy items.
• French industrial production is less sensitive to the woes of world trade. However, in France, too, June industrial production data disappointed. Manufacturing production was down 2.2% mom and down 0.6% yoy, much worse than May’s +3.3% yoy.
• The Dutch industrial sector is strongly linked to Germany. Dutch June manufacturing output contracted by 0.8% mom and was down 2.2% yoy. The Dutch statisticians also publish a series ‘industrial sales’. The June reading was grim: -10.2% yoy against -4.2% yoy in May. The June reading was the poorest monthly yoy reading since 2009.”