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Economy in Brief

German IP Sinks Sharply
by Tom Moeller March 12, 2009

Among large EU economies that have reported results, Germany shows the fastest dropping industrial production over three-months as well as in the quarter-to-date. Its 8.1% plunge in MFG IP is right in line with the reported 8% drop in new orders. The new orders series continues to point to an accelerating pace of decline in the months ahead. Orders have been falling at a faster pace than IP for over a year as output declines have accelerated. Over three-months the order drop is at a pace of 60% compared to a drop at a 50% pace for output itself.

Consumer goods output is proving to be the stalwart of the recession in Germany. This is not too surprising because the German consumer has been like a rock, not accelerating spending much in the economy’s strong phase and now not decelerating much in the down phase. Still consumer goods output s dropping at a 6.4% pace over three months and is down by about 5% Yr/Yr. that compares to a better than 50% rate of decline for capital goods output and a better than 60% rate of decline for intermediate goods output. Consumer goods are a moderating factor.

Total German IP
Saar except m/m Jan-09 Dec-08 Nov-08 3-mo 6-mo 12-mo Quarter-to-Date
IP total -7.5% -3.9% -4.0% -47.1% -30.3% -19.2% -51.1%
Consumer Goods -0.4% 1.4% -2.6% -6.4% -1.5% -4.8% -2.1%
Capital Goods -12.3% -3.2% -3.0% -53.9% -35.1% -22.8% -62.4%
Intermediary Goods -8.1% -9.1% -6.2% -62.2% -43.6% -25.4% -64.2%
Memo              
Construction -7.8% 5.9% 0.3% -7.8% 0.4% -16.4% -22.2%
MFG IP -8.1% -4.7% -4.2% -50.4% -32.9% -20.5% -54.6%
MFG Orders -8.0% -7.6% -6.8% -60.7% -51.4% -35.2% -62.2%
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