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Report: Europe Headed For Industrial Slowdown

Manufacturers Alliance/MAPI outlook says Central and Western Europe will see a slowdown in manufacturing production, but will avoid recession.

ARLINGTON, Va. -- European manufacturing is headed for a soft landing, but no recession, due to strength in Germany and Central Europe, according to a Manufacturers Alliance/MAPI report.
The report divides Europe into two groups, Western Europe (which includes the Eurozone) and Central Europe (which includes the four largest economies of Central and Eastern Europe -- the Czech Republic, Hungary, Poland, and Slovakia).
Manufacturing production in Western Europe is seeing a gap between fast growers in Austria, Finland, Germany and Switzerland, and the slow growers in France, Italy and Spain, says report author Kris Bledowski, Manufacturers Alliance/MAPI economist.
The fast growers are benefiting from export demand in Central Europe and Asia, while the slow growers face domestic weakness and flagging international competitiveness.
The Eurozone manufacturing sector is expected to grow between 1 and 1.5 percent in 2008, down from 2.5 percent in 2007.
Although Central Europe has been faring better than Western Europe, manufacturing growth fell by one-half in 2007, mirroring the decline in the West.
Consumer durable goods and selected capital goods remain strong due to rising incomes and exports, but there are signs of weakness. Weakness is most notable in process industries and in some consumer non-durables.
Manufacturing production growth in Central Europe will slow from the 12 percent range in 2007 to 5 percent in 2008.
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