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Economy in Brief

Italian and French Orders Go Different Ways
by Robert Brusca  June 20, 2012

While there seems to be more anxiety about the Euro-Area it is far from clear what is going on. Orders trends for Italy and France are undergoing a major divergence. Orders for Italy in April are falling and are lower over three months while for France orders are stronger in April and are rising over three months. Yr/Yr Italy's orders are falling while France's orders are rising. In the current quarter Italian orders are falling while France's orders are rising. These are two countries whose orders metrics in the past have been close together; suddenly they are opposite.

Of course Italy is caught up relatively more with the problems of debt and issues of the peripheral countries and this is weighing on growth. But it was only recently that Germany's Zew Index after keeping a stiff upper lip fell sharply showing fear of contagion to the center countries of the Zone.

On balance the Zone is troubled and its traditional relationships appear to be breaking down to some degree. With its traditional institutions also under pressure it is a difficult time to make assessments for Europe. The G20 meeting just concluded and had few specifics and a few polemics to support Europe. It is not clear a lot of this optimism is well-founded. Europe needs more concrete action and fewer statements of intent. The more we hear statements on European solidarity and the less we hear about what Europeans will do for one another the more skeptical I get.

Italy Orders
SAAR Except M/M Apr-12 Mar-12 Feb-12 3Mo 6Mo 12Mo Q:2:D % Peak
Total -2.0% 3.5% -2.6% -4.7% -7.7% -9.1% -3.6% 78.5%
Foreign -4.3% 5.1% 1.0% 6.4% -4.6% -4.0% -4.8% 85.0%
Domestic -0.4% 2.6% -5.0% -11.3% -9.6% -12.1% -2.7% 72.3%
Memo
Sales -0.5% 0.0% 2.4% 8.1% -0.2% -3.6% -1.8% 87.9%
French Orders
SAAR Except M/M Apr-12 Mar-12 Feb-12 3Mo 6Mo 12Mo Q-2-D % Peak
Total 3.0% -1.2% -0.5% 5.0% 9.2% 5.2% 12.5% 82.0%
Foreign 2.8% -0.8% -1.2% 3.0% 10.1% 5.0% 11.6% 87.9%
IP xConstruct -0.7% 1.4% -0.9% -0.4% -0.9% -1.4% 0.0% 87.9%
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