Recent Updates

  • Spain: PPI (Dec)
  • Finland: Wholesale Prices, Domestic Supply Prices, PPI, Import & Export Price Index (Dec); Iceland: Wage Index (Dec)
  • Kyrgyz Republic: State Budget (Dec); Czech Republic: Business Cycle Survey (Jan); Tajikistan: Monetary Survey (Dec)
  • Malaysia: CPI by State (Dec)
  • Vietnam: Credit to the Economy, Liquidity & Deposits (Nov); Malaysia: CPI (Dec); China: International Trade, Foreign Trade Indexes (Dec)
  • more updates...

Economy in Brief

Orders in Near Collapse then (Negative) Growth Rates Stabilize
by Robert Brusca May 26, 2009

Order trends have deteriorated for both EMU domestic and foreign orders but each series also shows signs of a turn. Three month rates of growth are not as bad as six month rates of growth although six month rates of growth are worse than Yr/Yr rates of growth. February had posted some positive rates of growth for EMU in the month. Those turned negative in March. But that has been enough to blunt the slide in the growth rates. Still it is not a picture of growth, rather it’s a hint of putting the worst behind us – a rather common theme by now.

We can also learn something of the EMU situation from the new details released on German GDP in 2009-Q1

German GDP was rocked in 2009-Q1 by a huge pullback in capital spending a flow that receded at a 50% annual rate. Exports shrank at a stunning 34% annual rate and imports fell at nearly a 20% annual rate (buffering the slide in GDP). The theme of weak investment was extended by housing where investment fell at a comparatively tepid 10% pace. The weakness in capital formation spending dropped domestic demand at nearly a 6.8% annual rate.

Over the past year GDP fell by nearly 7%, a huge Yr/Yr drop, led by capital formation and export weakness. In the quarter consumer spending rose but over one year it is lower by just a tick. Germany’s weakness is not a product of consumer weakness. And with strong social welfare spending programs the likelihood of keeping a spillover to the consumer in check is good.

Germany, an important exporting nation, clearly it is importing a great deal of its weakness from abroad. In that respect it is encouraging that Germany has seen its orders jump by 3% in March. That hardly means that the episode of weakness in over. But it suggests that forces that will put an end to contraction may be in train. That is just another version of the same story that things are better than they were but not yet showing growth. Still that is the nature of recessions as they turn to recovery. You have to look for a gradual cessation of the slowing and a switch to a period of what will probably appear to be sporadic growth which then could develop more vigor. We are now just at the cusp where the declines in growth slow and we only seen a few scattered signs of growth. We are a ways from seeing consistent growth and any sort of strength.

Euro Area 16 and UK Industrial Orders
Saar except m/m Mo/Mo Mar-09 Feb-09 Mar-09 Feb-09 Mar-09 Feb-09
Euro Area Overview Mar-09 Feb-09 Jan-09 3-Mo 3-Mo 6-mo 6-mo 12-mo 12-mo
Total Orders -0.8% 0.0% -2.0% -11.0% -38.8% -44.5% -48.4% -31.3% -32.0%
E-16 Domestic MFG orders -1.5% 0.8% -1.2% -7.2% -30.3% -38.6% -44.9% -26.8% -28.5%
E-16 Foreign MFG orders -0.4% 1.1% -7.2% -23.5% -42.4% -48.2% -49.8% -32.0% -37.3%
Countries: Mar-09 Feb-09 Jan-09 3-Mo 3-Mo 6-mo 6-mo 12-mo 12-mo
Germany (MFG): 3.3% -3.3% -8.0% -28.8% -55.2% -47.4% -58.1% -34.5% -37.5%
France (Ind): -6.7% 6.7% -2.5% -11.3% 13.8% -33.7% -27.9% -23.9% -23.2%
Italy (Ind): -2.7% -2.1% -3.9% -29.6% -27.5% -39.8% -39.4% -29.8% -31.2%
UK (Engineering Ind): -1.1% 17.3% -32.5% -62.5% -3.0% -48.6% -16.0% -14.6% -23.3%
German GDP
    Consumption Capital Formation Domestic
  GDP Private Public Total Housing Exports Imports Demand
% change Q/Q; X-M is Q/Q change in Blns of euros
Q1-09 -14.4% 1.8% 1.0% -50.7% -9.9% -33.4% -19.8% -6.8%
Q4-08 -8.6% -1.1% -0.3% -18.3% -5.0% -28.6% -15.4% -0.2%
Q3-08 -2.1% 1.0% 0.5% 1.1% -0.6% -1.6% 17.0% 5.6%
Q2-08 -2.0% -2.0% 2.0% 2.3% -13.4% -0.8% -6.9% -4.7%
% change Yr/Yr; X-M is Yr/Yr change in Gap in Blns of euros
Q1-09 -6.9% -0.1% 0.8% -19.7% -7.3% -17.5% -7.3% -1.6%
Q4-08 -1.8% -0.6% 1.5% -2.4% 0.3% -6.3% 1.2% 1.9%
Q3-08 0.8% -0.4% 1.9% 6.5% 2.0% 3.2% 5.2% 1.5%
Q2-08 2.0% -0.4% 2.1% 7.8% 2.8% 5.4% 3.9% 1.1%
5-Yrs 0.3% 0.2% 1.0% 2.3% -0.2% 3.2% 4.7% 0.7%
close
large image