Global| May 08 2012German IP Decline Slaps On The Brakes...
Summary
German IP jumped by 2.8% month-to-month in March rebounding from a small decline of 0.3% in February. As result of this strength IP is now up at a 15.8% annual rate over three months and is up by 0.2% in the first quarter over Q4. In [...]
German IP jumped by 2.8% month-to-month in March rebounding from a small decline of 0.3% in February. As result
of this strength IP is now up at a 15.8% annual rate over three months and is up by 0.2% in the first quarter over Q4.
In an unusual twist German consumer goods output led the rebound rising by 3% m/m compared to 2% for capital goods and 0.3% for intermediate goods.
The German construction sector is rebounding sharply too in March up at a 30.7% annual rate month-to-month. Still construction is lower in its Q/Q framework falling at a 6.2% annual rate.
Manufacturing IP was up strongly but at a much lesser pace than the headline at 1.4%. MFG also has an accelerating 3-month rate of growth and is showing a solid rise in the quarter-over-quarter framework at 0.9%. Earlier we saw that German orders were up strongly in March.
Europe overall is still in the grip of concerns about Greece. The lead party has failed to form a government so now the opportunity to form a government will be handed down the line. No one is very optimistic. In Russia there are street protests after Putin took his oath of office. In Italy overnight regional elections have showed a shift to the left there.
The political situation is still unstable and in the Zone the inability in Greece to form a government could push Greece into a default since it needs a government to approve the next round of austerity in order to get the next slug of funds from the bailout deal. Of course the Greek party now trying to set up a government, Syriza, is dedicated to cancelling the existing bailout accord and much more.
So, while Germany is showing some life the Euro-Area continues to show threats.
| Total German IP | |||||||
|---|---|---|---|---|---|---|---|
| SAAR Except M/M | Mar-12 | Feb-12 | Jan-12 | 3Mo | 6Mo | 12Mo | Q-2-D |
| IP total | 2.8% | -0.3% | 1.2% | 15.8% | 3.6% | 1.5% | 0.2% |
| Consumer | 3.0% | -1.7% | -0.6% | 2.8% | -0.8% | -2.1% | -5.8% |
| Capital | 2.0% | 1.4% | 1.9% | 23.4% | 7.7% | 5.3% | 6.0% |
| Intermed | 0.3% | -0.3% | 0.7% | 2.8% | -2.9% | -0.2% | -2.3% |
| Memo | |||||||
| Construction | 30.7% | -16.9% | 4.7% | 67.6% | 24.2% | 5.5% | -6.2% |
| MFG IP | 1.4% | 0.3% | 1.1% | 11.5% | 2.1% | 1.8% | 0.9% |
| Real MFG Orders | 2.2% | 0.6% | 0.0 | 5.6% | 4.1% | -1.2% | -2.9% |
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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