Recent Updates

  • US: GDP by Industry (Q1)
  • Canada: Retail Trade (May), CPI (Jun)
  • Thailand: Trade (Jun); China: Loans from Financial Institutions (Jun); Korea: Trade in Goods (Jun); Taiwan: Export Orders (Jun)
  • Turkey: NCI Index (Jul)
  • Turkey: Established & Liquidated (Jun-Press); Morocco: CPI, Public Finance (Jun)
  • Spain: Workers Affected by Layoffs (Apr); Foreign Trade (May)
  • more updates...

Economy in Brief

EU Index Near a High but Losing Momentum
by Robert Brusca August 31, 2007

The accompanying chart is the paradox of Europe. Its sentiment index is very high yet there is already a clear loss in momentum. Historically, breaks in momentum have led to significant slow downs. So far this one has been different.

The main EU measures also show some subtle losses in momentum. This softening is reinforced by declines in sentiment indexes across the major EU members. Only France (missing its observations for August) has showed continued increases in sentiment up until now. The retail sector is relatively the strongest with its highest reading to date in August. Financial turmoil appears to have not phased it. The industrial sector is still relatively strong posting its eighth highest reading. But consumer sentiment has slipped and is in its 82nd percentile far from the 90-plus readings for retail and industry. Across the main EMU/EU countries they stand in the 60th to 80th percentiles of their ranges. This means that for EU overall it is the smaller countries that are doing even better. It is reasonable to wonder if they are simply lagging in their slowdown. There is little evidence that the recent turmoil in markets has had an impact since consumer confidence is where we would expect to see it, and that gauge did slip this month, but has been slipping in any event.

EU Sectors and Country level Overall Sentiment
EU Aug-07 Jul-07 Jun-07 May-07 Percentile Rank Max Min Range Mean R-SQ
w/Confid
Overall 113.2 113.3 115 115 91.5 20 117 74 43 100 1.00
Industrial 5 5 7 6 94.1 8 7 -27 34 -7 0.89
Consumer Confidence -3 -2 -2 -1 82.8 27 2 -27 29 -10 0.82
Retail 6 5 5 5 100.0 1 6 -21 27 -6 0.46
Construction 0 0 1 1 93.3 13 3 -42 45 -18 0.43
Services 21 20 21 23 71.1 55 32 -6 38 17 0.80
  % m/m Based on Level Level  
EMU -0.9% -0.6% -0.4% 1.0% 83.1 39 117 74 44 100 0.94
Germany -0.9% -0.5% -0.4% 0.8% 73.7 26 121 79 42 100 0.61
France #N/A 0.6% 0.0% 3.0% #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Italy -3.0% -0.9% -1.3% -1.4% 63.5 84 121 72 49 100 0.79
Spain 1.1% -0.9% 1.2% -1.2% 62.3 134 118 67 50 100 0.67
Memo: UK 4.5% -5.7% 1.6% 3.4% 90.3 8 119 69 50 100 0.38
Since 1990 except Services (Oct 1996)                  208-Count   Services: 126-Count        
Sentiment is an index, sector readings are net balance diffusion measures
close
large image