European Slowdown Confirmed By Recent Data

A gauge of German investor sentiment fell more than expected this month,

while industrial production in the euro zone was flat in July, according to recent reports that reinforced perceptions that

the region’s economic recovery had peaked well before output recovered to precrisis levels.

The ZEW index of economic expectations, a poll of 277 financial market analysts conducted by the Center for European Economic Research in Mannheim, Germany,

A gauge of German investor sentiment fell more than expected this month,

while industrial production in the euro zone was flat in July, according to recent reports that reinforced perceptions that

the region’s economic recovery had peaked well before output recovered to precrisis levels.

The ZEW index of economic expectations, a poll of 277 financial market analysts conducted by the Center for European Economic Research in Mannheim, Germany,

fell to minus [ – ] 4.3 points from plus [ + ] 14 points in August, as pessimists outnumbered optimists.

Analysts surveyed by Bloomberg had said that they expected the index to slip to plus [ + ] 10 points this month.

Separately, the European Union statistics agency, Eurostat, said that

industrial production in the 16-country euro area was unchanged in July from June, disappointing expectations for an increase.

In addition, Eurostat revised its data for June to show a 0.2 percent decline from May in industrial production,

compared with a decline of 0.1 percent reported previously.

July production was also flat in Germany, the euro area’s largest economy and engine of growth in recent months.

Though most analysts do not expect Europe to slip back into recession, they expect the pace of growth to slow in coming months.

“The German economy will stay on its recovery path,” Simon Junker, an analyst at Commerzbank in Frankfurt, wrote in a note.

“Economic growth will be weaker than in the strong second quarter but will still be above average.”

While the European economy grew more than expected earlier in the year,

and Germany recorded its best growth since reunification,

the continent remains less wealthy than before the financial crisis.

“The single-currency area has still only regained approximately half of the output lost in the recession,”

Chris Williamson, chief economist at the data provider Markit, wrote in an e-mail reported in the New York Times.

The German insurer Allianz said in a report that

global financial wealth grew 7.5 percent in 2009 but remained 4 percent below the 2007 level.

Jean-Claude Trichet, president of the European Central Bank, said after a meeting on the global economy with other central bank chiefs

that the group expected growth in advanced countries to be modest,

but for it to remain strong in emerging countries,

so you can understand why they were pretty excited about the trade deal with South Korea.