Last week brought a wave of negative economic data out of Europe.

According to the IHS Markit index, manufacturing activity across the euro zone hit 46.4 in July, down from 47.6 the month before. (A rating above 50 denotes positive expansion).

The contraction was particularly pronounced in Germany, where the IHS index dropped to 43.1 in July, substantially lower than the Reuters median forecast of 45.2 and its lowest reading since July 2012. The Purchasing Managers’ Index (PMI), which tracks services as well as manufacturing, also underperformed at 51.4 in July, below the consensus estimate of 52.3.

Barring a dramatic turnaround, Germany’s GDP will record contractions over the next two quarters.