Global| Jun 12 2013E-zone IP Rises Despite Cross-Currents
Summary
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 [...]
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.
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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