Weekly Economic Briefings > Eurozone Weekly Economic Briefing > Eurozone

Sharp falls in industrial production and German new orders this week appear to lend credence to the idea that the euro area recovery has been severely dented by slower global growth and particularly by contagion from the slowdown in some of the emerging markets. We suspect, however, that the underlying picture is stronger than the high frequency manufacturing data would appear to suggest. Much of the falls recovered in August look suspiciously like calendar effects associated with the timing of school holidays this year, which may have followed a sharp spike in uncertainty surrounding the negotiations with Greece in July. Certainly its noticeable that forward-looking sentiment data for September showed little weakness and we continue to argue that the European domestic recovery is proving resilient to any external slowdown.