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Economy in Brief

German Orders In Surprise Rebound
by Robert Brusca  May 7, 2009

Foreign orders that had been falling a bit faster than those from domestic sources were up by a sharp 5.6% m/m in May compared to a rise of 1.1% for orders from domestic sources. German factory orders from outside the 16-nation euro region rose 5.1 percent in March from February indicating that much of the orders strength was not just foreign but outside the zone as well. Export orders for investment goods rose 9.1 percent, driven by demand from within and outside the euro area.

Data trends however have swallowed up the good news. Three month growth rates of orders and sales are still declining faster than they did over six-months. Order growth is still accelerating in the downward direction. In the quarter the drop in sales and in orders remains horrific.

Even so the rise in orders is an encouraging sign. Even if the sharp rise this month has been crushed by the trends of past weakness, it is step in the right direction. This is how the trip toward stability starts. Germany is getting its break in terms of improved demand from external sources. Germany’s domestic initiatives- as well as initiatives from the e-Zone itself- are not yet bearing much fruit. At least the ECB took some further steps today in monetary policy to cut rates and to shoulder added policy moves.

German Orders and Sales By Sector and Origin
Real and SA % M/M % Saar
  Mar-09 Feb-09 Jan-09 3-MO 6-Mo 12-Mo Yr Ago QTR-2-Date
Total Orders 3.3% -3.1% -6.7% -23.9% -12.8% -33.1% 3.2% -46.5%
  Foreign 5.6% -0.9% -10.9% -24.5% -13.1% -36.0% 3.9% -53.7%
  Domestic 1.1% -5.5% -1.8% -22.6% -12.0% -29.4% 2.2% -36.9%
Real Sector Sales
MFG/Mining 1.5% -4.7% -6.6% -33.7% -18.6% -21.9% 3.3% -45.0%
  Consumer -0.4% -3.3% -6.0% -33.0% -18.2% -11.7% -0.9% -25.7%
  Cons Durables -1.4% -7.8% -2.2% -37.4% -20.9% -22.9% 0.1% -40.2%
  Cons Non-Durable -0.3% -2.6% -6.6% -32.4% -17.8% -9.7% -1.0% -22.8%
Captial Gds 4.8% -5.2% -9.4% -34.5% -19.1% -24.8% 6.0% -53.9%
Intermediate Gds -0.7% -3.3% -4.6% -29.6% -16.1% -24.6% 4.0% -44.0%
All MFG-Sales 1.5% -4.8% -6.6% -33.5% -18.5% -22.1% 3.3% -45.3%
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