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Economy in Brief

EU Commission Indices Weaken In April...For Most
by Robert Brucsa  April 26, 2012

For the whole of EU, the economic union, not just the monetary bloc, the economic sentiment index was flat in April. But for the monetary union the index fell by 1.7%. The index for Germany fell by 1%, France fell by 0.4% Italy’s index fell by 6.4% Spain’s fell by 2%. Increasing sentiment indices came from Greece, up 2.1% and up for the second month in a row and Portugal, up by 1.8%, and up for the fifth month in a row.

However, sentiment standings are weak and are very weak with few exceptions. The strong reading is for Germany where it is weaker than its current reading 69% of the time, and stronger only 31% of the time. For the Euro-Area, the reading is weaker only 17% of the time. That pretty much isolates Germany. France is the next best country with a reading that is weaker only 30% of the time. Italy, Spain, Greece and Portugal are weaker than their April readings less 15% of the time. These are very weak reports. Portugal despite a ‘string’ of monthly increases is still weaker than its April reading only 5.1% of the time.

Among the sectors in EU, Consumer confidence is the weakest in its queue as it is weaker only 13% of the time. The EU reading itself is weaker only 20% of the time. The industrial sector remains the relative strongest as it is weaker 45% of the time and is still close to its median value. Retailing is weaker about 38% of the time. Construction and services are weaker less than 30% of the time.

What we see this month is evidence that Europe is weakening and the EMU countries are weaker than the EU countries, evidence that the problems in the Zone are having an impact on Zone members.

While Markit PMI indices give a picture of a rapid unravel in EMU, other readings from the EU Commission as well as from some from previously released national sources, show a more gradual unraveling taking place.

Germany’s overall sentiment index is down strongly over the last two months falling 1% in April after dropping 2.2% in March. But Italy has plunged 6.4% in April after surging by 4.4% in March France is net higher over two months. Neither Greece nor Portugal has seen a decline in three months or more. The Zone is weakening but the pace of it is still uneven.

EU Sectors and Country level Overall Sentiment
EU Apr
12
Mar
12
Feb
12
Jan
12
%ile Rank Max Min Range Mean By Q
rank%
Overall Index 93.2 93.2 94 92.8 53.2 202 117 67 50 100 20.2%
Industrial -7.7 -7.1 -5.3 -7.2 67.3 139 7 -39 46 -7 45.1%
Consumer Confid -20.2 -19.3 -20.1 -20.8 35.5 219 2 -32 34 -12 13.4%
Retail -8.7 -11.3 -11.9 -14 52.6 157 8 -27 34 -7 37.9%
Construction -30 -29 -29 -31 32.0 179 4 -46 50 -19 29.2%
Services -3.7 -3.5 -4.4 -3.2 43.2 139 34 -32 66 9 25.7%
  % M/M Apr-12 Based on Level Level  
EMU -1.7% -0.1% 1.2% 92.8 48.6 209 118 69 49 99 17.4%
Germany -1.0% -2.2% 0.1% 103.3 69.8 100 117 73 44 99 60.5%
France -0.4% 2.2% 2.0% 95.2 48.2 175 117 75 43 100 30.8%
Italy -6.4% 4.1% 1.2% 83.1 22.2 231 121 72 48 100 8.7%
Spain -2.0% -1.2% -0.2% 89.1 38.9 217 116 72 43 100 14.2%
Greece 2.1% 1.1% 0.0% 77.3 12.0 238 119 72 48 100 5.9%
Portugal 1.8% 1.6% 0.3% 78.5 16.2 240 117 71 46 99 5.1%
Memo:UK 4.6% -2.6% 0.3% 95.7 60.6 194 116 64 52 101 23.3%
All since June 1990 253-Count Services: 187-Count  
Sentiment is an index, sector readings are net balance diffusion measures
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