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Economy in Brief

German Orders Take Another Swing Lower
by Robert Brusca March 6, 2008

Manufacturing orders were a little weaker at the start of the year than in the fourth quarter said the German ministry in a classic understatement of the facts. It noted, however, mitigating factors, such as a change in the tax depreciation system at the start of 2008 that caused many domestic companies to pull their orders backward into 2007. Even with that pull back December orders fell. And the 2008 growth rate as of January 2008 compared to the Q4 base sees a 7.6% annual rate of decline in Q1 2008. Domestic orders are shrinking at a 2.4% pace. But foreign orders, an area unaffected by the depreciation rule in Germany, sees Q1 orders are off at a 12.3% annual pace.

German orders are being compressed. German domestic orders peaked in September 2006 and have been declining irregularly ever since. There was an order rebound in November and December of 2007 but the down shift is again in train.

In Germany sales trends show declines for consumer durables and nondurables. Sales of intermediate goods have seen resurgence while capital goods sales continue to be quite firm and have recently re-accelerated. This is a continuation of the same story that sees the consumer sector weak and capital goods remaining strong.

German Orders and Sales By Sector and Origin
Real and SA % M/M % Saar
  Jan-08 Dec-07 Nov-07 3-MO 6-Mo 12-Mo YrAgo
Total Orders -1.5% -1.1% 3.0% 1.2% 0.6% 9.6% 6.9%
Foreign -1.3% -2.5% 2.3% -5.9% -3.0% 13.3% 5.6%
Domestic -1.9% 0.4% 3.7% 9.1% 4.5% 5.8% 8.1%
Sector Sales
MFG/Mining 1.4% 1.1% -0.7% 7.3% 3.6% 5.9% 9.1%
Consumer -0.5% 0.5% -0.6% -2.3% -1.1% 1.1% 4.7%
Cons Durables -2.6% 2.8% -0.2% -0.4% -0.2% -1.5% 7.0%
Cons Nondurable 0.0% -0.1% -0.6% -2.6% -1.3% 1.5% 4.3%
Capital Goods 2.7% 0.9% -2.1% 6.0% 3.0% 7.9% 11.3%
Intermediate Goods 0.6% 1.9% 0.8% 14.1% 6.8% 6.2% 9.2%
All MFG Sales 1.3% 1.2% -0.9% 6.7% 3.3% 5.6% 8.8%
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