Global| Jan 27 2011EU Commission Index Encounters Growth Set-Back
Summary
The EU Commission overall index fell in January to 105.8 from 106.1. Among the main gauges only the industrial gauge improved in January. Consumer confidence slipped, retail confidence stumbled badly and the other sectors were [...]
The EU Commission overall index fell in January to 105.8 from 106.1. Among the main gauges only the industrial gauge
improved in January. Consumer confidence slipped, retail confidence stumbled badly and the other sectors were unchanged.
Among our group of sample countries EMU Members Germany and Portugal each took a step back as did the EU’s UK.
The queue-based rankings tell the story of which sectors are leading. The industrial sector for EMU is in the 96th percentile of its range since 1990. The service sector lags the most standing in the 29th percentile of its range. Next weakest is construction, in its 30th percentile followed by consumer confidence in its 28th percentile. Oddly with consumer confidence and services so weak retailing stands in the 96th percentile of its range on the heels of the reading for MFG.
Notice that these ranks do not seem to correspond to the net balance readings in the table. The rankings do not compare the raw readings directly but rather look at each sector's raw reading according to its own historic performance. So retailing with a +4 reading is in its own historic context just about as rare and strong a reading as having MFG at +5. Whereas the services sector at a stronger-seeming +6 stands only in the 29th percentile of its range –much weaker than MFG or retailing.
The country data show clear divisions for this group: Germany is the strongest in the 93rd percentile of its queue-based range. France is second in its 77th percentile of its. For the rest the readings drop off sharply as Italy stands below its average at the 44th percentile, the UK is in its 43rd percentile, Spain and Portugal both are in the 18th percentile of their respective queue-based ranges. Greece is in the bottom 7th percentile of its queue. Yet each is a member of the Euro-Area and there is one monetary policy for all of them. With that, the ECB already is saber-rattling over inflation risks.
This month's performance shows a weaker overall Europe. We are seeing the same thing in US data where data are irregular but where relatively firm industrial readings are still being posted. Weaker results are being seen in other sectors in the US as is true in Europe. The UK has put up a weaker than expected Q4 GDP report. The US issues its Q4 GDP reading on Friday. Europe has all sorts of question marks hanging over its head. This report dispels none of them.
| EU Sectors and Country level Overall Sentiment | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EU | Jan 11 |
Dec 10 |
Nov 10 |
Oct 10 |
%ile | Rank | Max | Min | Range | Mean |
| Overall Index | 105.8 | 106.1 | 105 | 103.8 | 80.3 | 77 | 115 | 68 | 47 | 100 |
| Industrial | 5 | 4 | 1 | 0 | 95.7 | 9 | 7 | -39 | 46 | -8 |
| Consumer Confid | -13 | -12 | -11 | -12 | 55.9 | 155 | 2 | -32 | 34 | -11 |
| Retail | 4 | 8 | 3 | 3 | 87.9 | 10 | 8 | -25 | 33 | -6 |
| Construction | -28 | -28 | -28 | -28 | 31.1 | 175 | 3 | -42 | 45 | -18 |
| Services | 6 | 6 | 8 | 5 | 58.7 | 121 | 32 | -31 | 63 | 12 |
| % M/M | Jan 11 |
Based on Level | Level | |||||||
| EMU | -0.1% | 1.2% | 1.3% | 106.5 | 78.6 | 73 | 116 | 71 | 46 | 100 |
| Germany | -1.4% | 1.3% | 2.4% | 115.6 | 88.6 | 17 | 121 | 75 | 46 | 100 |
| France | 0.7% | 3.1% | -0.9% | 108.0 | 76.1 | 58 | 119 | 74 | 44 | 100 |
| Italy | 0.2% | 0.8% | 1.4% | 99.1 | 57.4 | 141 | 120 | 71 | 50 | 100 |
| Spain | 0.2% | -0.9% | 0.3% | 91.3 | 43.9 | 206 | 116 | 72 | 44 | 100 |
| Greece | 3.1% | -1.3% | -0.5% | 75.6 | 24.4 | 233 | 123 | 60 | 62 | 99 |
| Portugal | -0.8% | 3.3% | -2.4% | 91.2 | 47.5 | 206 | 116 | 69 | 48 | 100 |
| Memo:UK | -1.2% | 0.8% | 0.4% | 100.5 | 70.5 | 142 | 115 | 65 | 50 | 100 |
| All since Oct 1990 | 253 -Count | Services: | 172-Count | |||||||
| Sentiment is an index, sector readings are net balance diffusion measures | ||||||||||
| EU Sectors and Country level Overall Sentiment | ||
|---|---|---|
| EU | By Queue Rank% | Average Level is: |
| Overall Index | 69.6% | 100.1 |
| Industrial | 96.4% | -8.0 |
| Consumer Confid | 38.7% | -11.4 |
| Retail | 96.0% | -5.7 |
| Construction | 30.8% | -18.4 |
| Services | 29.7% | 12.5 |
| % Average | ||
| EMU | 71.1% | 106.4 |
| Germany | 93.3% | 115.1 |
| France | 77.1% | 107.9 |
| Italy | 44.3% | 99.2 |
| Spain | 18.6% | 91.7 |
| Greece | 7.9% | 76.7 |
| Portugal | 18.6% | 91.6 |
| Memo:UK | 43.9% | 100.5 |
| All since Oct 1990 | 253 '-Count | Services: 172 |
| Sentiment is an index, sector readings are net balance diffusion measures | ||
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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