If there's one lesson to be learned from the current economic malaise, it's that everything has an unpredictable side. Take what's happening in Europe as proof.
Last week's crazy market fluctuations touched all the major global companies and created both panic and sheer elation. In addition, the ongoing debt crisis and the European Union's bailout of struggling members have once again overshadowed the continent's recovery efforts. This time, the bad news came in the form of a productivity decline.
Last week, observers were surprised to see a slowdown in euro zone industrial production. The Wall Street Journal reported that industrial production in the 17-country euro zone fell in June at the sharpest rate in six months.
When compared with May 2011, June's seasonally adjusted industrial production dropped 0.7 percent in the euro area and 1.2 percent in the 27-country EU. In May, production rose by 0.2 percent in both zones, noted Eurostat, the EU's statistics-keeping office.
Earlier this month, a Markit survey of manufacturers across the euro area found that productivity growth was nearing stagnation and manufacturing output was contracting, putting growth activity at its weakest levels in almost two years. (Download the PDF here).
In the euro zone's biggest economies, June's industrial production fell 0.8 percent in Germany, 1.7 percent in France, 0.6 percent in Italy, and 0.8 percent in Spain, according to Eurostat.
Even so, the signals are anything but clear. Compared to June 2010, industrial production increased 2.9 percent in the euro zone and 1.7 percent in the EU, according to Eurostat. Import and export data released by Eurostat last week also produced mixed results. "The sum of EU-27 imports and exports to countries outside the EU rose by almost one quarter between 2009 and 2010. Exports recovered to a higher level than seen in 2008, while imports rose by more than exports, leading to an increase in the overall trade deficit."
As if this wasn't becoming painfully obvious, the European Central Bank reiterated the change of pace in its monthly bulletin:
Global economic activity has lost momentum in recent months, as evidenced by the decline in sentiment indicators. In the Governing Council’s assessment, the risks to this economic outlook for the euro area remain broadly balanced in an environment of particularly high uncertainty. On the one hand, consumer and business confidence, together with improvements in labour market conditions, could continue to provide support to domestic economic activity. On the other hand, downside risks may have intensified.
They relate to the ongoing tensions in some segments of the euro area financial markets, as well as to global developments, and the potential for these pressures to spill over into the euro area real economy. Downside risks also relate to further increases in energy prices, protectionist pressures, and the possibility of a disorderly correction of global imbalances.
Yeah, that's sounds like a complicated way of saying, "We should all hang tight for a while longer. The roller coaster ride is anything but over."