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Economy in Brief

Slowdown in Orders is Broad-Based
by Robert Brusca  September 19, 2011

German orders are slipping. So are orders in Spain. The monthly data are choppy but the trends are clearer. By comparison the US order-flow is holding up and has steadied.

The German orders profile is the most extreme because Germany came into the post financial crisis period with the strongest rebound and has since begun to lose momentum. Spain’s orders recovered from their recession trough as well but did not post the degree of strength in the recovery of Germany. The US has been a middle case. Still, many US indicators are losing momentum. Compared to the best of the Zone and one of the most troubled countries in the Zone US orders are holding up quite well. But it is unclear how long this can last

At the over-the-weekend European meeting that came ahead of the IMF/World Bank/G-20 meeting, the European finance ministers seemed to decide that further action was out of their hands.

Despite a seeming statement of solidarity from key European leaders last week Merkel, Sarkozy and Papandreou, the Euro-Area seems on a path to give Greece the right to sink or swim left to its own devices. No new ECB support has been offered; no new slack has been cut. The Germans see monetary policy as the wrong solution. Greece complains that it is being made a scapegoat for European leadership and debt issues. That is where we stand ahead of this week’s international meetings.

The imbroglio is affecting growth in all of the Zone as onlookers are wondering how bad it will get and if contagion will sweep through the Zone.

Faltering orders are just one sign of the encroaching weakness. Europe’s decision to fight fire with inaction hardly seems to be a bold act that will bring success.

Euro-Area EU US Industrial Orders & Sales Trends
SAAR Except M/M % M/M Jul
Euro-Area Detail Jul
3Mo 6Mo 12Mo 12Mo 12Mo SAAR
Germany: -3.0% 1.4% 1.9% 1.0% 5.8% 11.0% 22.3% -23.8% -8.5%
Spain 0.9% -4.4% 2.7% -3.7% -6.2% 5.2% 5.0% -25.9% -7.3%
US factory Orders 2.4% -0.4% 0.6% 10.8% -2.8% 10.6% 12.9% 13.9% 14.6%
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