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Economy in Brief

Euro Area Orders Take Wing Again
by Robert Brusca  February 23, 2011

Euro-Area orders continue to knock down some pretty good numbers. There was a slowing over the previous three months but since then orders have snapped back and are on a tear, up by 1.4% in Oct, 2.2% in Nov and 2.1% in Dec. The three month growth rate is up to 25.2% annualized.

Manufacturing sales for the Zone have been through a similar ordeal but with a slightly less pronounced slowdown phase. Still sales are up at a 27.2% annual rate in the three month period ended in December.

France is now the growth leader with orders up at a 62% annual rate over three months. French and Italian orders surged in December.

Still Italy shows a deceleration in orders growth following a lull over the previous three months (three month growth rate ended in November) from which it is still recovering, but not especially robustly. Italy’s orders surge by 5.4% in December but that merely blunts the impact of a 4.3% decline in orders in November. Italy’s sequential growth rates are slowing down.

Spain’s sequential growth rates hint at slowing down but their deceleration is not yet clear. Spain has put together two good months of growth together after one month with a severe drop.

Germany, the iron-man of the Euro-Area economies, saw orders drop in December but that followed a spurt in November and over three months German orders are still growing at a 16% annual rate.

Euro-Area domestic orders grew by 5.2% in December; much of this spurt was homegrown. Foreign orders fell by 1% but that followed a surge of 4% in November. Domestic orders had been the source of the slowdown for the three months ended in November, when overall Euro-Area growth rates turned negative. In that period the drop-off was because domestic orders fell at a 6.5% pace. But EMU domestic order growth appears to be on track again and foreign orders which were showing a steady deceleration on sequential growth rates in November are back strong and accelerating quite impressively over three months compared to six months.

On balance there has been some volatility and weakness in the Euro-Area from late in 2010 onward. But it appears to not to have been a lethal blow even in the wake of all the debt concerns about Europe. The European financing package, which still needs to be patched up, appears to have done its job. Now with conflict arising in the Middle East region there is another blow to ward off. This one appears as if it will hit Italy the hardest. But we have several more months before we will see its impact since data in this report are for December and these are events largely in February.

Selected Euro-Area Industrial Orders
SAAR Except M/M Mo/Mo Dec
10
Nov
10
Dec
10
Nov
10
Dec
10
Nov
10
Euro-Area Detail Dec
10
Nov
10
Oct
10
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo
MFG Orders 2.1% 2.2% 1.4% 25.2% -2.9% 10.0% 10.6% 18.5% 16.7%
MFG Sales 3.0% 0.9% 2.3% 27.7% 3.3% 11.8% 5.7% 15.2% 10.9%
Consumer 1.8% 0.3% 0.6% 11.3% -1.8% 5.0% -0.7% 5.1% 3.6%
Capital 3.1% -0.4% 4.8% 34.0% 6.7% 12.5% 9.7% 16.5% 11.4%
Intermediate 5.2% 2.5% -2.2% 24.2% -6.5% 16.8% 4.4% 14.2% 10.0%
Memo:MFG
Total Orders 2.1% 2.2% 1.4% 25.2% -2.9% 10.0% 10.6% 18.5% 16.7%
E-13 Domestic MFG orders 5.2% 2.5% -2.2% 24.2% -6.5% 16.8% 4.4% 14.2% 10.0%
E-13 Foreign MFG orders -1.0% 4.0% 1.3% 18.5% 4.6% 9.6% 12.4% 23.9% 23.5%
Countries: Dec
10
Nov
10
Oct
10
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo
Germany (MFG): -2.9% 5.2% 1.6% 16.5% 13.9% 4.1% 20.0% 23.8% 24.9%
France(Ind): 7.5% 2.8% 2.2% 62.5% 15.9% 28.0% 17.2% 5.9% 16.9%
Italy (Ind): 5.4% -4.3% -0.1% 3.1% -20.9% 9.0% -5.3% 13.5% 10.1%
Spain(Ind): 2.4% 1.7% -3.2% 3.0% -12.4% -1.9% 1.5% 7.4% 10.9%
Compare: US Factory Ord 0.2% 1.3% -0.7% 2.9% 15.2% 9.0% 7.2% 8.1% 9.2%
Some Euro-Area reporters are timely and some lag. This table allows a sequential inspection of trends regardless of topicality
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