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Economy in Brief

by By Robert Brusca Euro Area Output Rebounds in July September 12, 2007

Trends in Euro area production seem solid; recent months seem less certain.

The chart shows that there were several months of output slowdown in early to mid summer period. July, however, brings a rebound to what had been flagging trends. The three-month trend is clearly revived; the others are not revived as clearly, but their decline is arrested. And with the financial turmoil in markets we will want to see August and September data for sure to draw meaningful conclusions about trend.

May was a strong month for output and by and large it has carried the quarter. Output for capital goods and for intermediate goods has expanded steadily in recent months, but intermediate goods is off to a weak start in Q3. For consumer goods, June and July are a weak pair of months for output and consumer goods output is off to a moderate start in Q3 as well.

Major Euro area countries that have reported have showed output strength in the recent three months. Germany alone has weak trends in June and July. The UK, an EU member, has had three weak months in a row and its output is lower in the new quarter compared to Q2.

Euro area and UK IP and MFG
Saar except m/m Mo/Mo Jul-07 Jul-07 Jul-07  
Euro area Detail Jul-07 Jun-07 May-07 3-Mo 6-mo 12-mo Q-2-Date
MFG 0.6% -0.1% 0.8% 5.6% 2.6% 4.2% 5.2%
Consumer Goods 0.3% -0.3% 0.6% 2.2% 0.9% 2.8% 1.6%
Consumer Durable Goods -0.1% 0.0% 1.8% 6.9% 1.2% 2.0% --
Consumer Nondurable Goods 0.3% -0.4% 0.5% 2.0% 1.0% 3.0% --
Intermediate Goods 0.5% 0.2% 0.9% 6.1% 2.3% 3.7% 0.0%
Capital Goods 1.0% 0.2% 1.1% 9.5% 4.6% 6.3% 3.4%
Memo: MFG 1-Mo% 1-Mo% 1-Mo% 3-Mo 6-mo 12-mo Q-2-Date
Germany 0.2% -0.3% 1.9% 7.0% 3.1% 5.7% 3.4%
France: IP excl Construction 1.3% -0.6% 0.8% 5.9% 3.9% 2.6% 6.9%
Spain 1.9% -3.9% 6.8% 19.3% -8.6% 4.2% 8.3%
UK -0.3% 0.1% 0.3% 0.4% 0.8% 0.8% -0.8%
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