· EMU IP came up flat in June but the declining trends are clear. Capital goods output, consumer goods output and intermediate goods output all are on declining profiles. Among large EU/EMU countries Germany is the main exception that helps to prop up output in the month. Elsewhere the results were much worse on the month. The weakness in IP mirrors the weakness in order growth. Nonetheless, in Germany Bert Ruerup, the head of the council of wise men, is opposed to any German stimulus plan. Of course Germany is still best performing of the EMU large economies. 

· Incoming EMU data continue to show weakness of various sorts. It fits with a picture of global slowing. UK claims data today showed the greatest gain in job market claimant activity in 15 years. In Japan authorities are very worried about export growth. Flat IP in EMU seems a sure bet to give way to declining IP and that will pose a threat to US export growth that is still performing so well, as we saw in the US trade report from yesterday. Everyone is linked and the disease of weaker growth is still spreading. 

E-zone MFG IP

Saar except m/m

Mo/Mo

Jun-08

May-08

Jun-08

May-08

Jun-08

May-08

Euro Area Detail

Jun-08

May-08

Apr-08

3-Mo

3-Mo

6-mo

6-mo

12-mo

12-mo

Q-2-Date

MFG

0.0%

-1.4%

0.4%

-4.0%

-6.6%

-1.2%

-0.9%

-0.1%

-0.1%

-3.9%

Consumer

0.8%

-2.0%

0.9%

-1.4%

-7.8%

-1.7%

-3.2%

-1.2%

-2.9%

-3.7%

Consumer Durables

-0.1%

-3.2%

1.9%

-5.9%

-12.2%

-3.5%

-3.8%

-5.1%

-5.1%

--

Consumer Non-Durables

0.9%

-1.4%

0.2%

-1.1%

-7.0%

-1.4%

-2.9%

-0.4%

-2.4%

--

Intermediate

-0.2%

-1.5%

0.3%

-5.1%

-6.6%

-2.0%

-0.5%

-0.9%

-0.5%

-4.0%

Capital

-0.4%

-2.0%

2.1%

-1.4%

-6.7%

1.0%

0.9%

1.7%

2.8%

-1.7%

Main E-zone Countries and UK IP in MFG

Mo/Mo

Jun-08

May-08

Jun-08

May-08

Jun-08

May-08

MFG Only

Jun-08

May-08

Apr-08

3-Mo

3-Mo

6-mo

6-mo

12-mo

12-mo

Q-2-Date

Germany

0.5%

-1.9%

-0.3%

-6.9%

-9.2%

-2.2%

-0.8%

2.2%

1.3%

-6.1%

France: IP excl Construction

-0.4%

-2.9%

1.3%

-7.8%

-10.2%

-4.9%

-2.9%

-1.6%

-1.8%

-5.3%

Italy

0.2%

-1.5%

0.4%

-3.3%

-4.9%

1.5%

1.1%

-2.0%

-2.6%

-2.5%

Spain

-4.9%

-14.8%

27.5%

13.9%

-33.7%

-17.5%

-10.0%

-9.6%

-7.7%

2.2%

UK

-0.5%

-0.6%

0.0%

-4.2%

-4.2%

-1.5%

-1.0%

-1.3%

-0.9%

-2.9%