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Economy in Brief

German Industrial Output Halts Its Strong Of Declines
by Robert Brusca May 6, 2009

German industrial production halted its string of six consecutive declines with a flat result in March. Over three months the negative growth rate for IP has flattened but at a still horrific -33% (saar). Ironically, the capital goods sector shows the worst results and fasted decline in its three month rate of growth compared to other sectors. Yet the capital goods sector is the only sector with an output increase in March – and a strong one at that.

Construction is in its second month of increasing output. However, manufacturing output fell in March, but it did trim that drop to -0.2% from -3.5% previously. And of course the flat IP result fits in nicely with the surge in German orders in March. The process of blunting the forces of the downturn and establishing an environment of growth is now fully engaged in Germany, Europe’s largest economy. Coupled with the fresh ECB rate cut and the ECB’s decision on to engage in covered bond purchases, Europe has some new reason for hope.

Saar exept m/m Mar-09 Feb-09 Jan-09 3-mo 6-mo 12-mo Quarter-to-Date
IP total 0.0% -3.4% -6.3% -32.7% -33.1% -20.3% -40.1%
Consumer -2.0% -3.7% -0.6% -22.7% -14.6% -9.8% -13.9%
Capital 2.5% -5.2% -13.5% -50.1% -41.5% -24.7% -55.8%
Intermed -2.4% -1.3% -4.0% -27.0% -40.4% -26.2% -43.9%
Memo
Construction 7.6% 1.9% -7.5% 5.5% 14.6% 4.9% -0.6%
MFG IP -0.2% -3.5% -7.7% -37.8% -37.1% -22.9% -45.7%
MFG Orders 3.3% -3.1% -6.7% -23.9% -43.3% -33.1% -46.5%
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