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Economy in Brief

German IP Continues to Sink
by Robert Brusca  August 8, 2012

German IP fell by 0.9% in June after gaining back part of an outsized drop from April in May. The three month growth rate is a deep negative -5.9% annualized exceeding the pace of decline over 12-months. Construction output is falling sharply over three-months- a sharp reversal of past trends. MFG IP is off sharply over three months as well. MFG orders have been steadily decaying and they too are off sharply in the recent three months.

Europe remains weak. Just today the bank of England cut its growth outlook and the Bank of France looks for the economy to slip back into recession. Germany continues to be surrounded by a weak and faltering growth zone. The Eurozone’s problems continue to fester as there is no real short term support nor is there a longer run plan to lift it from its malaise. Differences among members on how to handle the crisis continue to be impediments to action.

It appears that weakness in the zone is beginning to have a more severe negative impact on the German economy.

Total German IP
SAAR Except M/M Jun-12
3-Mo 6-Mo 12-Mo Quarter-to-Date
IP total -0.9% 1.7% -2.3% -5.9% 1.6% -0.2% -0.6%
  Consumer -0.9% 3.6% -3.4% -3.1% -0.4% -2.3% -1.2%
  Capital -1.6% 2.2% -3.7% -12.0% -0.3% 1.5% -5.7%
  Intermed -0.3% 1.1% -0.4% -1.8% 2.1% -1.8% 1.4%
Construction -2.0% 2.6% -5.5% -18.7% 7.1% 3.3% 18.9%
MFG IP -1.1% 2.1% -2.3% -5.1% 0.5% -0.4% -2.0%
Real MFG Orders -1.7% 0.7% 0.0 -9.3% -0.5% -7.7% 2.6%
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