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Economy in Brief

German Order Growth Spirals Lower
by Robert Brusca  October 6, 2011

German industrial orders have fallen for the second month running. In July plunging foreign orders took the headline for orders growth into negative territory but in August it was weak domestic orders that dragged the series into contraction. It’s always something.

Despite the fact that foreign orders show an odd 12-mo to 6-mo to 3-mo accelerating trend that seems more the product of some odd serendipity that a slice of reality order growth is slowing down. Domestic orders have on the same growth sequence taken a large step lower.

The broader Yr/Yr trends depicted in the chart take the broader perspective where the overarching trend is most clear. It shows both the series’ volatility as well as the clear downward trend for each on annual percentage changes.

Germany is the traditional strong country in EMU and it is under a great deal of stress. Germany’s growth metrics are still at or near the best of the Zone but its gauges of growth are weakening. Weak conditions in adjoining states as well as ongoing concerns about debt conditions and the prospects for knock-on effects are taking a substantial toll on growth and investor and consumer attitudes. In Europe investors are looking for investment safe-havens to protect capital instead of looking at ways to make capital grow. Risk is off the investment table because so much of risk encroaches on everyday life.

German Orders and Sales By Sector and Origin
Real and SA % M/M % SAAR
  Aug-11 Jul-11 Jun-11 3Mo 6Mo 12Mo YrAgo Q-2-Date
Total Orders -1.4% -2.6% 1.8% -8.6% 4.1% 3.6% 20.5% -7.7%
Foreign 0.1% -7.2% 13.1% 21.4% 4.2% 1.5% 29.0% -6.8%
Domestic -3.2% 3.7% -10.1% -33.6% 4.3% 6.6% 10.8% -8.3%
Real Sector Sales
MFG/Mining -0.4% 4.0% -0.1% 14.4% 7.2% 8.5% 11.1% 17.2%
Consumer -1.5% -1.3% 2.9% 0.0% -0.6% 2.3% 1.0% -7.7%
Cons Durables -8.8% 11.5% -3.8% -8.6% -3.8% 4.3% 8.0% 18.4%
Cons Non-Durable -0.2% -3.3% 4.0% 1.7% 0.0% 2.0% -0.1% -11.3%
Captial Gds 1.5% 7.0% -0.4% 36.7% 14.8% 12.9% 14.5% 39.7%
Intermediate Gds -2.1% 2.5% -0.5% -1.0% 1.9% 7.1% 13.3% 5.2%
All MFG-Sales -0.4% 4.0% -0.1% 14.4% 7.3% 8.5% 11.2% 17.2%
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