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Economy in Brief

Euro-Area Orders Slow
by Robert Brusca   January 05, 2011

Both domestically motivated and foreign motivated orders are in a declining trend in the Euro-Area. The standard deviation o f the monthly percentage change in orders in 2010 has been 3.2 percentage points. Taken alone booth domestic-sourced and foreign-sourced orders have a standard deviations of about 5 percentage points per month. The monthly inflow of orders has been choppy and hard to read. Orders are up by a sharp 17.9% Yr/Yr but October of 2009 was a weak month and so that calculation is skewed upward. The Yr/Yr gain in September is only 13.5%. If we take the basic Yr/Yr growth to be 15%, then the monthly (unannualized) orders have a volatility factor is one third the year–over-year rate of growth.

The 3M- and 6M- and 12M-growth rates for both domestic and foreign orders show clear deceleration in place. Over 3-months domestic orders growth is down to a 1.4% annual rate while foreign orders are still relatively strong at a 5.7% rate of growth but also are decelerating.

This seems to be more than a simple slowing from a heated recovery.

Sales trends are a bit hard to read as overall sales remain quite strong, but consumer goods sales are clearly decelerating as are intermediate goods sales. Meanwhile capital goods sales remain strong. On the face of it such trends do not seem very sustainable.

Among the counties in the Table only France clearly shows orders are slowing steadily. The trends in EMU remain complex but their underpinning is now questionable.

Selected Euro-Area Industrial Orders
SAAR Except M/M Mo/Mo Oct
'10
Sep
'10
Oct
'10
Sep
'10
Oct
'10
Sep
'10
Euro-Area Detail Oct
'10
Sep
'10
Aug
'10
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo
MFG Orders 1.4% -4.2% 5.2% 9.3% -3.1% 15.0% 10.8% 17.9% 13.5%
MFG Sales 2.2% -2.1% 2.5% 10.5% -2.5% 13.2% 3.4% 11.5% 9.1%
Consumer 0.5% -1.3% 1.0% 0.6% -1.3% 6.1% -0.1% 4.5% 3.4%
Capital 4.8% -2.7% 3.4% 23.7% -6.5% 23.2% 2.2% 12.6% 5.7%
Intermediate -2.2% -2.0% 4.6% 1.4% 10.7% 4.9% 11.4% 9.2% 8.0%
Memo:MFG
Total Orders 1.4% -4.2% 5.2% 9.3% -3.1% 15.0% 10.8% 17.9% 13.5%
E-13 Domestic MFG orders -2.2% -2.0% 4.6% 1.4% 10.7% 4.9% 11.4% 9.2% 8.0%
E-13 Foreign MFG orders 1.5% -5.0% 5.2% 5.7% -1.6% 14.9% 13.1% 22.5% 20.2%
Countries: Oct
'10
Sep
'10
Aug
'10
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo
Germany(MFG): 1.4% -3.4% 3.6% 5.9% -7.2% 8.3% 13.1% 22.8% 18.3%
France(Ind): 2.3% -1.5% -0.9% -0.4% -0.4% 11.9% -1.1% 13.3% 0.8%
Italy(Ind): 0.0% -1.2% 6.8% 23.7% 15.7% 10.1% 21.6% 15.6% 17.2%
Spain(Ind): -3.3% -1.3% 6.3% 5.9% -5.3% 4.1% 5.3% 2.2% 6.1%
Compare: US Factory Ord -0.7% 3.0% 0.0% 9.7% 15.3% 0.8% 4.2% 9.1% 11.0%
Some Euro-Area reporters are timely and some lag. This table allows a sequential inspection
of trends regardless of topicality
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