BUSINESS CYCLE DECLINE DURING THE REMAINDER OF THIS YEAR AND INTO THE FIRST HALF OF 2020
The state of Europe’s economy is especially varied at this juncture in the business cycle, with significant differences between regions and sectors. Divergent trends have arisen between Western and Eastern Europe as well as between Europe Consumer Nondurable and Durable Goods Production. The net result is stagnation for Europe Industrial Production in recent months. The annual average in April was up 0.5% year over year, but 0.3% below a tentative October 2018 peak. Movements in leading indicators such as the G7 Leading Indicator, the Europe Manufacturing Purchasing Managers Index, and the Europe M1 Money Supply suggest business cycle decline (slowing growth or recession) in Production will extend into early 2020; we expect a mild recession during this business cycle.