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Economy in Brief

EMU MFG Still Digging Its Way Out
by Robert Brusca November 12, 2009

MFG IP in the e-Zone rose in September laying a foundation for continued economic recovery. Over three months the annual rate of IP growth is now 1.9% compared to flat over six months and lower by 13.8% over 12-months.

To be sure the lift off in IP is less than in indicators such as the Markit MFG PMI index or the jump in orders. But it takes longer for actual output to be put to work than for indicators of improvement to show progress. The large countries are showing more rapid increases in growth than is EMU as a whole.

For Germany three-month growth is up at an 18.7% annual rate; that is surpassed by the ever volatile results from Spain that skyrocketed at a 29% pace over three months. France is up at an 8% pace; Italy is up at a 4% pace. EU member the UK is lagging as it has MFG IP up at a tiny 0.5% pace over three-months. For this group six-month growth rates are all positive and the three-month results show acceleration compared to six months. Over 12-months IP in all countries still is falling rapidly, at a double-digit pace.

By industry the consumer sector continues to lag. Consumer durables output is off on the month and over three months it is down by -2.1% countered by a three-month rise of 1.6% in consumer nondurables output. Capital goods output is up at a 6.6% pace over three-months. Intermediate goods output is flying at a 13% annual rate of expansion as commodities and raw goods lead the cycle

These figures confirm the trend we already have seen. Consumers are lagging and raw goods are rising strongly. Investment is picking up. Still consumer sentiment is one of the stronger barometers for EMU even though consumer spending and the output of consumer goods has been lagging.

E-zone MFG IP
Saar except m/m Mo/Mo Sep
09
Aug
09
Sep
09
Aug
09
Sep
09
Aug
09
 
Ezone Detail Sep
09
Aug
09
Jul
09
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo Q-3
MFG 0.3% 0.3% -0.1% 1.9% 0.0% 0.0% -2.3% -13.8% -16.5% 0.9%
Consumer 0.3% -0.4% 0.5% 1.4% -0.8% 1.7% -0.6% -3.2% -4.9% 1.0%
C-Durables -6.0% 5.2% 0.6% -2.1% 8.3% -10.7% -4.2% -19.2% -15.0% --
C-Non-durables 1.1% -1.1% 0.4% 1.6% -1.9% 3.4% 0.4% -0.8% -3.4% --
Intermediate 0.6% 1.0% 1.4% 13.0% 13.4% 10.7% 7.3% -16.6% -19.6% 14.1%
Capital 1.7% 1.4% -1.4% 6.6% 0.5% 3.0% 0.2% -18.7% -22.2% 2.1%
Main E-zone Countries and UK IP in MFG
  Mo/Mo Sep
09
Aug
09
Sep
09
Aug
09
Sep
09
Aug
09
 
MFG Only Sep
09
Aug
09
Jul
09
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo Q:3
Date
Germany: 3.2% 2.1% -1.0% 18.4% 7.1% 14.9% 9.6% -14.3% -19.2% 15.2%
France:IPx Construct'n -1.5% 2.8% 0.7% 8.0% 15.5% 6.3% 7.2% -10.4% -10.0% 12.2%
Italy -5.7% 5.9% 1.1% 4.0% 32.7% 3.0% 5.9% -16.9% -13.5% 12.9%
Spain 0.7% -3.0% 9.1% 29.2% 47.0% 19.5% 6.9% -12.4% -10.6% 33.1%
UK: EU member 1.7% -2.0% 0.4% 0.5% -4.0% 0.2% -2.5% -9.4% -11.6% -0.5%
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