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Economy in Brief

German Orders Hold Gains
by Robert Brusca April 7, 2010

German orders were flat in February as they held the 5.1% m/m gain from the month before. Foreign orders built on a 3.7% gain in January by rising an additional 1.8% m/m as domestic orders gave back 1.9 percentage points of their 6.7 percentage point spurt in January. Over three months foreign orders are rising at an 11.8% pace while domestic orders are right behind at a 9.7% pace. Overall orders are up by 24.5% Yr/Yr, they are lower over six months, but are back strong on the three-month horizon.

In the quarter to date German orders are showing a strong lift rising at a 24.1% annual rate, with nearly identical foreign and domestic order rates of growth. Sales of consumer durables and capital goods are advancing the fastest in Germany in the quarter.

The orders news in Germany for February is good buffer to the revised Q4 e-Zone GDP growth rate which has been cut to show zero growth. But, looking ahead, the OECD now expects G-7 growth to slow although growth in the US is expected to lead the pack. Europe is having a hard time getting growth lined up. Its broader social safety net put a quicker bottom on the decline in GDP in the Zone during the downturn, but the enlarged public sector deficits and fiscal problems throughout the e-Zone put any further fiscal help off limits. Europe’s more stifled job market means that private sector jobs will not comeback quickly leaving its hope for stronger growth in the hands of the export sector.

German orders data are encouraging from that standpoint. Germany seems to making its export-led progress and the domestic sector appears to be in tow. The Service sector is coming along in Europe as well. That is important because that will be the sector of job creation that will sustain recovery.

German Orders and Sales By Sector and Origin
Real and SA % M/M % Saar  QTR
to Date
  Feb-10 Jan-10 Dec-09 3-MO 6-Mo 12-Mo YrAgo
Total Orders 0.0% 5.1% -2.4% 10.5% 5.1% 24.5% -36.2% 24.1%
Foreign 1.8% 3.7% -2.5% 11.8% 5.7% 30.1% -40.7% 23.5%
Domestic -1.9% 6.7% -2.1% 9.7% 4.8% 18.7% -30.6% 24.9%
Real Sector Sales
MFG/Mining -0.1% 1.3% -1.1% 0.4% 0.2% 8.2% -24.1% 3.0%
 Consumer -2.0% -4.0% 2.2% -14.6% -7.6% -1.5% -11.7% -12.8%
 Cons Durables -2.5% 4.1% -2.1% -2.6% -1.3% 5.3% -22.2% 10.8%
 Cons Non-Durable -2.0% -5.0% 2.8% -16.3% -8.5% -2.4% -9.8% -15.6%
Captial Gds 1.0% 2.6% -1.3% 9.4% 4.6% 10.9% -29.9% 11.9%
Intermediate Gds -0.1% 2.6% -2.8% -1.2% -0.6% 12.3% -24.3% 2.7%
All MFG-Sales 0.0% 1.2% -1.1% 0.4% 0.2% 8.4% -24.3% 2.6%
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