by Hagtzel
LONDON, Aug 23 (Reuters) – Euro zone business activity declined far more than thought in August with the slide in Germany particularly fast, while some inflationary pressures returned, surveys showed.
Wednesday’s purchasing managers’ indexes complicate matters for the European Central Bank which wants to control still rampant price rises without causing a recession.
www.reuters.com/markets/europe/euro-zone-services-slide-deepens-economic-gloom-pmi-2023-08-23/
During recessions consumers tend to swap to cheaper alternatives: beef => pork, pork => chicken, chicken => eggs.
Other common behaviors:
- increase in savings
- cuts on more expensive stuff e.g. people will buy non branded alternatives. This is good for companies that sell lots of non-branded cosmetics but I don’t know the tickers for those.
- generally delivery services suffer more, same for restaurants
- people tend to acquire less debt (financing goes down, this will be amplified by the current rates) which isn’t good for lenders
- people change cars less (this is a benefit for companies like AAP that sell spare parts and bad for automakers)
The only thing that this recession should have more mild is impact on travels. Projected demand is said to be high for the next 12 months.
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