Global| Mar 23 2011Euro-Area Orders Barely Edge Up on Strong Foreign Demand
Summary
EMU orders are up by just 0.1% in January after rising by 2.7% in December and 2.1% in November. Despite the weak January result the three-month growth rate is up at an accelerated rate of growth compared to six months and is slightly [...]
EMU orders are up by just 0.1% in January after rising by 2.7% in December and 2.1% in November. Despite the weak
January result the three-month growth rate is up at an accelerated rate of growth compared to six months and is slightly
higher than the 12-mo rate of growth. Domestic orders fell in January by 0.2% but on the heels after a 4.9% surge in December.
That makes the January weakness appear to be more of a timing issue between January and December orders.
Foreign orders are on an opposite cycle having dropped in December they rebounded strongly in January.
Country level data show a great deal of order variability in Dec/Jan period. Germany, France and Italy each showed order reversal patterns between December and January with monthly growth rates switching signs.
With such volatility across the largest zone economies we can only look at broader breadth patterns to get a clue on what is going on. There only Italy shows evidence of a withering pattern of growth. For Italy sequential growth rates are declining steadily from 14% to 12% to 2.7% from 12-mos, to 6-mos to 3-mos. Other large economies are showing trendless growth fluctuations or acceleration.
Manufacturing sales are accelerating. There is strength across sectors as well. While the small drop in orders may hint at some slowing, the broader trends and evidence across Euro-Area member countries and sectors shows that the manufacturing recovery remains in force across the Euro-Area and across Euro-Area sectors. The weakness in January is just part of the normal variability in a very volatile sector.
While the BOE decided today in the face of rising inflation to bide its time at it sees inflation headed to 5% even as core inflation is rising, we are unlikely to see the same temperance from the ECB. Growth in the Zone seems solid enough to pave the way for Trichet to follow through on the kind rate hike that he has been hinting at in recent weeks. Today’s report seems to find the Euro-Area economy strong enough to accomplish that goal.
| Selected Euro-Area Industrial Orders | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| SAAR Except M/M | Mo/Mo | Jan 11 |
Dec 10 |
Jan 11 |
Dec 10 |
Jan 11 |
Dec 10 |
||
| Euro-Area Detail | Jan 11 |
Dec 10 |
Nov 10 |
3Mo | 3Mo | 6Mo | 6Mo | 12Mo | 12Mo |
| MFG Orders | 0.1% | 2.7% | 2.1% | 21.7% | 28.0% | 15.3% | 11.3% | 20.9% | 19.3% |
| MFG Sales | 3.0% | 2.3% | 0.9% | 28.1% | 24.8% | 19.5% | 10.7% | 16.4% | 14.2% |
| Consumer | 0.3% | 1.2% | 0.2% | 7.0% | 8.3% | 3.9% | 3.5% | 4.4% | 4.2% |
| Capital | 2.1% | 2.4% | -0.3% | 18.0% | 30.9% | 21.2% | 11.2% | 17.1% | 15.6% |
| Intermediate | -0.2% | 4.9% | 2.6% | 32.9% | 23.3% | 16.1% | 16.5% | 18.2% | 14.1% |
| Memo:MFG | |||||||||
| Total Orders | 0.1% | 2.7% | 2.1% | 21.7% | 28.0% | 15.3% | 11.3% | 20.9% | 19.3% |
| E-13 Domestic MFG orders | -0.2% | 4.9% | 2.6% | 32.9% | 23.3% | 16.1% | 16.5% | 18.2% | 14.1% |
| E-13 Foreign MFG orders | 2.5% | -0.6% | 4.2% | 27.0% | 22.3% | 16.8% | 10.8% | 26.9% | 24.9% |
| Countries: | Jan 11 |
Dec 10 |
Nov 10 |
3Mo | 3Mo | 6Mo | 6Mo | 12Mo | 12Mo |
| Germany (MFG): | 3.7% | -2.9% | 5.4% | 27.3% | 17.3% | 16.8% | 4.1% | 21.2% | 23.8% |
| France(Ind): | -7.8% | 8.4% | 2.7% | 10.6% | 66.8% | 5.2% | 29.7% | 12.3% | 6.9% |
| Italy (Ind): | -0.3% | 5.4% | -4.3% | 2.7% | 3.1% | 12.1% | 9.0% | 14.2% | 13.5% |
| Spain(Ind): | 4.3% | 2.4% | 0.0% | 30.1% | 15.7% | 19.7% | 6.2% | 12.1% | 8.6% |
| Compare: US Factory Ord | 3.1% | 1.4% | 1.3% | 25.8% | 8.1% | 17.5% | 11.6% | 9.7% | 9.5% |
| Some Euro-Area reporters are timely and some lag. This table allows a sequential inspection of trends regardless of topicality | |||||||||
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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