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Economy in Brief

IP Rebound Screams Recovery
by Robert Brusca April 14, 2010

Even with that strong-seeming chart and rock solid 0.9% gain in February, manufacturing IP in the Zone remains some 14% below it past cycle peak. But eh current progress looks good as growth over 3-and 6-months have average a pace of 19%. The consumer sector continues to lag with a three-month growth rate of 2.2%.

Among large Euro-Area member countries Spain grew the strongest in Feb, but it is a volatile report from Spain that fell by 3.4% in January, undercutting the impact of the gain in February. The UK, an EU member, had the next strongest gain among large European economies at 1.3% but that was a recoup from a -0.9% result in January. Italy with a 0.2% rise on the heels of a 1.7% gain has the best two-month result followed by Germany at 0.2% and 0.6%, in Feb and Jan, respectively. Still, both Germany and Spain show IP contractions over three-months. Spain’s output is still falling over 12-months but over 12-months German IP is up by 7.1%., followed by France at 3.3% Italy at 3% and the UK at 1.5%.

The February gains were on the back of a spike in intermediate goods output which advanced by 1.5%. Capital goods output rose by 0.9%. The consumer categories receded. Europe needs to get its consumer in gear. Europe, like many countries is trying to let its export sector pull it out of its recessionary hole almost all by itself. This is imbalanced growth that leans heavily on demand with origins elsewhere. Europe needs to learn to stand on its own two feet.

Euro-Area MFG IP
Saar except m/m Mo/Mo Feb
10
Jan
10
Feb
10
Jan
10
Feb
10
Jan
10
Euro-Area Detail Feb
10
Jan
10
Dec
09
3Mo 3Mo 6mo 6mo 12mo 12mo Q-4
 MFG 0.9% 1.3% 0.3% 10.6% 12.6% 10.1% 9.0% 4.2% 0.9% 12.3%
Consumer -0.3% 0.5% 0.3% 2.2% 9.1% 1.2% 2.2% 1.1% -0.1% 5.1%
C-Durables -0.6% 2.6% -1.5% 1.4% 12.2% 7.3% 10.5% -0.3% -2.5%   
C-Non-durables -0.2% 0.3% 0.6% 2.8% 7.5% 3.1% 1.3% 1.5% 0.6%
Intermediate 1.5% 0.8% -1.1% 4.6% 1.8% -4.2% 6.2% 6.9% 3.6% 5.1%
Capital 0.9% -1.1% 0.0% -0.7% 1.5% 4.5% 5.9% 3.1% -0.8% -0.7%
Main Euro-Area Countries and UK IP in MFG
Mo/Mo Feb10 Jan10 Feb10 Jan10 Feb10 Jan10  
MFG Only Feb
10
Jan
10
Dec
09
3Mo 3Mo 6mo 6mo 12mo 12mo Q:4
Date
Germany: 0.2% 0.6% -1.3% -2.1% 1.3% 4.5% 8.7% 7.1% 3.2% -3.1%
France:
IPxConstruct'n
0.0% 1.1% -0.3% 3.2% 6.9% 0.7% 5.3% 3.3% 2.6% 4.1%
Italy 0.2% 1.7% -0.6% 5.3% 6.8% 7.6% 3.8% 3.0% -0.6% 5.3%
Spain 1.6% -3.4% -0.6% -9.3% -15.4% -11.9% -7.3% -2.1% -2.0% -9.9%
UK: EU member 1.3% -0.9% 0.9% 5.5% 0.5% 6.3% -0.7% 1.5% 0.1% 3.3%
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