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Economy in Brief

Euro Orders Continue to Plunge
by Robert Brusca August 22, 2008

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.

Euro Area and UK Industrial Orders & Sales Trends
Saar except m/m % m/m Jun
08
Jun
08
Jun
08
Jun
07
Jun
06
Qtr-2
-Date
Euro Area Detail Jun
08
May
08
Apr
08
3Mo 6mo 12mo 12mo 12mo Saar
MFG Sales 0.4% 0.3% 0.3% 4.2% 7.1% 4.4% 6.9% 7.7% 4.1%
Consumer 0.1% 0.1% 0.0% 0.9% 0.8% 1.7% 6.9% 7.7% 0.5%
Capital 0.3% 0.2% 0.2% 3.0% 4.8% 4.7% 4.5% 4.0% 3.5%
Intermediate 0.7% -5.2% 4.7% 0.2% 1.9% -1.8% 8.5% 6.9% 1.0%
MFG Orders
Total Orders -0.3% -5.3% 3.6% -8.6% -2.3% -7.4% 17.3% 6.4% -6.0%
EA 15 Domestic MFG orders 0.7% -5.2% 4.7% 0.2% 1.9% -1.8% 12.2% 4.5% 1.0%
EA 15 Foreign MFG orders -0.7% -4.8% 0.0% -20.2% -7.4% -12.1% 23.2% 8.5% -15.7%
Countries: Jun
08
May
08
Apr
08
3Mo 6mo 12mo 12mo 12mo Qtr-2
-Date
Germany -3.1% -1.4% -1.0% -19.9% -12.1% -7.6% 18.5% 9.6% -13.4%
France 0.1% -6.3% 5.9% -2.5% -4.0% -13.7% 19.3% 3.4% -11.3%
Italy #N/A -3.1% 0.5% #N/A #N/A #N/A 10.7% 10.1% #N/A
UK (EU) -2.4% -8.1% 20.6% 37.0% 2.5% 2.8% 1.4% 8.1% -5.5%
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