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Economy in Brief

US Fails to Follow EMU IP Collapse...So Far
by Robert Brusca  March 14, 2012

The EMU area showed just the slightest of increases in IP in January as the index gained 0.1%. Still it was enough of a gain to blunt the ongoing drop in IP and turn the three-month growth rate at -3.8% higher than the 6-month growth rate of -4.3% - barely.

Consumer IP is falling at an increasing rate in EMU. But that is due to the collapse in nondurable goods output as output for consumer durables ticked up in January. Intermediate goods and capital goods are each showing declines over three-month and six-months but for each the rate of decline over three-months is not quit as severe as over six months.

Most large EMU nations are showing IP falling over three-months but France and Spain are exceptions this month. The UK, an EU not an EMU member has IP up strongly over three-months.

EMU data are in a tug of war for trend. The up-to-date Zew survey is showing surging confidence for investment in Germany in EMU and in nearby Switzerland. But manufacturing is showing withering trends for industrial output and orders.

The new quarter is still quite fresh. But if we take the Japan IP level as a percentage gain over the Q4 level, production is sliding at a -3% annual rate in Q1 led by a collapse in consumer goods output with weakness in intermediate goods and a pretty flat capital goods sector.

Across member countries in January Germany and Spain (as well as the UK) have IP growing in Q1 over their respective Q4 level. But IP is falling in France, Italy, Ireland and Portugal.

EMU and EU trends are far for certain. Austerity remains the law of the land. And Germany is pressing the ECB to take a more anti-inflation stance. With the trend negative, fiscal stance negative, and pressing for monetary policy to be more restrictive, what is the prospect for growth to revive in Europe? Surely it can’t be good.

Euro-Area MFG IP
SAAR Except M/M Mo/Mo Jan
12
Dec
11
Jan
12
Dec
11
Jan
12
Dec
11
 
Euro-Area Detail Jan
12
Dec
11
Nov
11
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo Q-2-D
MFG 0.1% -0.7% -0.4% -3.8% -3.6% -4.3% -1.8% -0.1% 0.2% -3.0%
Consumer -0.6% 0.0% -1.4% -7.8% -3.0% -4.0% -2.7% -1.8% -1.2% -6.4%
Consumer Durables 0.1% -0.1% 0.2% 0.5% -4.3% -13.5% -0.3% -3.8% -2.7% --
Consumer Non durables -0.7% -0.1% -1.6% -9.1% -4.1% -3.3% -3.2% -1.7% -1.0% --
Intermed. 0.2% -1.1% 0.0% -3.4% -6.5% -5.2% -3.9% -1.7% 0.2% -3.1%
Capital 0.8% -1.2% 0.2% -1.2% -0.6% -3.5% 1.6% 3.2% 1.8% -0.1%
Main Euro-Area Countries and UK IP in MFG
Mo/Mo Jan
12
Dec
11
Jan
12
Dec
11
Jan
12
Dec
11
 
MFG Only Jan
12
Dec
11
Nov
11
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo Q-2-D
Germany 1.5% -1.9% -0.3% -3.1% -6.2% -5.9% -2.6% 3.3% 1.7% 0.5%
France IPxConst'n 0.3% -1.3% 1.1% 0.4% 0.0% -3.2% -0.4% -1.5% -1.2% -1.1%
Italy -2.5% 1.4% 0.1% -4.1% 3.3% -5.6% -2.2% -4.1% -1.7% -9.1%
Spain 3.3% 0.8% -0.9% 13.2% -6.7% 3.0% -5.1% -3.9% -5.2% 22.8%
Ireland 0.7% 2.6% -12.1% -31.9% -9.8% 0.9% 2.1% -0.5% -3.5% -11.4%
Portugal 1.2% -1.1% -2.9% -11.1% -13.2% -0.5% -8.7% -4.2% -8.9% -3.6%
UK: EU member 0.1% 1.2% -0.1% 4.7% 0.4% -0.4% -1.0% 0.3% 0.8% 5.2%
Some Euro-Area reporters are timely and some lag. This table allows a sequential inspection of
trends regardless of topicality
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