Global| Jan 05 2011Euro-Area Orders Slow
Summary
Both domestically motivated and foreign motivated orders are in a declining trend in the Euro-Area. The standard deviation o f the monthly percentage change in orders in 2010 has been 3.2 percentage points. Taken alone booth domestic- [...]
Both domestically motivated and foreign motivated orders are in a declining trend in the Euro-Area. The standard deviation o
f the monthly percentage change in orders in 2010 has been 3.2 percentage points. Taken alone booth domestic-sourced
and foreign-sourced orders have a standard deviations of about 5 percentage points per month. The monthly inflow of orders
has been choppy and hard to read. Orders are up by a sharp 17.9% Yr/Yr but October of 2009 was a weak month and so that
calculation is skewed upward. The Yr/Yr gain in September is only 13.5%. If we take the basic Yr/Yr growth to be 15%, then the
monthly (unannualized) orders have a volatility factor is one third the year–over-year rate of growth.
The 3M- and 6M- and 12M-growth rates for both domestic and foreign orders show clear deceleration in place. Over 3-months domestic orders growth is down to a 1.4% annual rate while foreign orders are still relatively strong at a 5.7% rate of growth but also are decelerating.
This seems to be more than a simple slowing from a heated recovery.
Sales trends are a bit hard to read as overall sales remain quite strong, but consumer goods sales are clearly decelerating as are intermediate goods sales. Meanwhile capital goods sales remain strong. On the face of it such trends do not seem very sustainable.
Among the counties in the Table only France clearly shows orders are slowing steadily. The trends in EMU remain complex but their underpinning is now questionable.
| Selected Euro-Area Industrial Orders | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| SAAR Except M/M | Mo/Mo | Oct '10 |
Sep '10 |
Oct '10 |
Sep '10 |
Oct '10 |
Sep '10 |
||
| Euro-Area Detail | Oct '10 |
Sep '10 |
Aug '10 |
3Mo | 3Mo | 6Mo | 6Mo | 12Mo | 12Mo |
| MFG Orders | 1.4% | -4.2% | 5.2% | 9.3% | -3.1% | 15.0% | 10.8% | 17.9% | 13.5% |
| MFG Sales | 2.2% | -2.1% | 2.5% | 10.5% | -2.5% | 13.2% | 3.4% | 11.5% | 9.1% |
| Consumer | 0.5% | -1.3% | 1.0% | 0.6% | -1.3% | 6.1% | -0.1% | 4.5% | 3.4% |
| Capital | 4.8% | -2.7% | 3.4% | 23.7% | -6.5% | 23.2% | 2.2% | 12.6% | 5.7% |
| Intermediate | -2.2% | -2.0% | 4.6% | 1.4% | 10.7% | 4.9% | 11.4% | 9.2% | 8.0% |
| Memo:MFG | |||||||||
| Total Orders | 1.4% | -4.2% | 5.2% | 9.3% | -3.1% | 15.0% | 10.8% | 17.9% | 13.5% |
| E-13 Domestic MFG orders | -2.2% | -2.0% | 4.6% | 1.4% | 10.7% | 4.9% | 11.4% | 9.2% | 8.0% |
| E-13 Foreign MFG orders | 1.5% | -5.0% | 5.2% | 5.7% | -1.6% | 14.9% | 13.1% | 22.5% | 20.2% |
| Countries: | Oct '10 |
Sep '10 |
Aug '10 |
3Mo | 3Mo | 6Mo | 6Mo | 12Mo | 12Mo |
| Germany(MFG): | 1.4% | -3.4% | 3.6% | 5.9% | -7.2% | 8.3% | 13.1% | 22.8% | 18.3% |
| France(Ind): | 2.3% | -1.5% | -0.9% | -0.4% | -0.4% | 11.9% | -1.1% | 13.3% | 0.8% |
| Italy(Ind): | 0.0% | -1.2% | 6.8% | 23.7% | 15.7% | 10.1% | 21.6% | 15.6% | 17.2% |
| Spain(Ind): | -3.3% | -1.3% | 6.3% | 5.9% | -5.3% | 4.1% | 5.3% | 2.2% | 6.1% |
| Compare: US Factory Ord | -0.7% | 3.0% | 0.0% | 9.7% | 15.3% | 0.8% | 4.2% | 9.1% | 11.0% |
| Some Euro-Area reporters are timely and some lag. This table allows a sequential inspection of trends regardless of topicality |
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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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