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Economy in Brief

 German IP Drops Sharply Again 
by Robert Brusca  April 9, 2009

We saw the weakness in German orders so it is not surprising that output is having the same experience in Germany . Industrial output fell by a large 2.9% in January on the heels of a dizzying 6.1% drop in January. Output is declining at an even faster rate over three-months than over six months and over six months the annual rate pace of decline is -35%, over three months it is -40.8%. The deceleration in output is being led by the important capital goods sector. The rate of decline in consumer goods output and in intermediate goods is still large but those two sectors have held the line in February with the same 3-month growth rate as for six months. Capital goods are plunging at a 60% rate up sharply from a -40% pace over six months. This is a sector that is important to German exporters and German foreign-sourced orders have been falling sharply. Output in the construction sector managed a rise in Feb after a super-plunge in January; it has been volatile. Its 3-monht growth rate is nearly neutral (-0.8% saar). Manufacturing IP is down even more sharply over three months at -47% compared to -39% over six months. Orders weakness suggests there is more of this to come.

Total German IP
Saar exept m/m Feb-09 Jan-09 Dec-08 3-mo 6-mo 12-mo Quarter-
to-Date
IP total -2.9% -6.1% -3.9% -40.8% -35.0% -20.3% -43.1%
Consumer -3.6% -0.6% 1.4% -11.0% -12.9% -7.7% -10.8%
Capital -4.5% -14.1% -3.2% -60.1% -46.4% -27.6% -62.8%
Intermed -1.9% -2.1% -9.1% -41.9% -40.6% -22.8% -43.2%
Memo              
Construction 1.9% -7.5% 5.9% -0.8% -6.0% -14.6% -13.3%
MFG IP -3.4% -7.3% -4.8% -47.3% -39.3% -22.5% -49.1%
MFG Orders -3.5% -6.7% -7.3% -51.5% -55.6% -36.3% -54.5%
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