· Euro
orders fell again in June by less month-to-month than in May but drove
the Yr/Yr drop to -7.4%. That is much deeper than the -1.8% Y/Y drop
recorded in May. Domestic orders in the zone are down Yr/Yr but are
still struggling to show growth over 3 months and 6 months. But foreign
orders are weak and weakening. Foreign orders are down at a very sharp
20.2% annual rate over the most recent three months compared to falling
by 12.1% Yr/Yr.
· By comparison sales are still growing in the zone and are growing for consumer goods Capital goods and intermediate goods on most horizons. Still sales growth shows signs of slowing. With the declines in orders we expect to see clearer weakness in sales in coming months.
· The county level adapt are peculiar. Germany shows a clear trend of progressive deterioration in orders. For France orders growth is becoming less weak over the shorter horizons, indicating improvement. That trend is not credible given the weak French industrial data we have seen. In the UK orders have surged strongly in the past three months even as UK GDP has gone flat. The overall EMU data tell a much clearer story of trends. The country level data appear to be unstable and the country level contrary data are not particularly compelling. Europe is weakening. The country level should fall into line on this theme in the coming months.