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Economy in Brief

E-zone IP Rises Despite Cross-Currents
by Robert Brusca  June 12, 2013

E-Zone IP is accelerating, putting in surprising strength in April with a gain of 1%. It is on a steady run of acceleration and is up strongly in the quarter-to-date.

Finland, Italy, Spain and Portugal are contrary showing decelerating trends that are opposite to those in the Zone as a whole. France, Germany, The Netherlands, and Greece are showing steady acceleration, supporting the overall Zone trend.

The unevenness in the Zone is reflected in the quarter's irregularity across most sectors. Consumer goods output is still declining in the quarter. Intermediate goods output is barely edging higher. Capital goods output is super-strong driving the overall trend and dominating weakness elsewhere.

Trends show that consumer goods output is still in a contracting phase that is worsening. Intermediate goods output is in a recovering phase and capital goods output is in full acceleration.

The internal e-Zone cross-currents as well as the sector differences cast doubt on the longevity of this spurt in e-Zone output. This month's sharp bump up in Zone IP was a surprise. The contributing gain from France in particular is a surprise based on other recent reports in France. I don't think this takes the Zone out of the woods nor am I sure that and it is an enduring step toward enduring growth in the Zone.

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