Global| Aug 07 2008German IP Falls Sharply in Quarter Despite Rise in June
Summary
Larger order drop points to even worse performance in Q3. Trends in German output are losing momentum across all sectors despite a small rebound in the current month. Consumer goods output has been weakening for some time but the [...]
Larger order drop points to even worse performance in Q3.
Trends in German output are losing momentum across all sectors despite a small rebound in the current month. Consumer goods output has been weakening for some time but the softening in capital goods output is a relatively new phenomenon.>
Output of consumer goods and capital goods rose in June after falling sporadically in earlier months intermediate goods output that feeds both sectors, is simply declining. The sequential growth rates in the table show that that the annual rate of decline is becoming progressively weaker in the more recent periods- indicating cumulating weakness across sectors.
In the quarter-to-date (now a complete Q2, but not yet fully revised Q2), IP is dropping at a 6.4% pace led by a weak consumer sector (-9.7%) MFG output is dropping at a 6.1% pace. MFG orders are dropping at an even sharper 15.4% pace in the quarter, an ominous sign for Q3.
| Total German IP | |||||||
|---|---|---|---|---|---|---|---|
| Saar except m/m | Jun-08 | May-08 | Apr-08 | 3-mo | 6-mo | 12-mo | Quarter -to-Date |
| IP total | 0.2% | -1.8% | -0.2% | -7.2% | -2.3% | 1.6% | -6.4% |
| Consumer Goods | 1.0% | -0.3% | -3.0% | -8.9% | -5.8% | -0.2% | -9.7% |
| Capital Goods | 1.4% | -3.7% | 2.7% | 1.5% | 2.1% | 4.5% | -4.3% |
| Intermediary Goods | -0.6% | -1.0% | -1.9% | -12.9% | -4.5% | 1.3% | -6.1% |
| Memo | |||||||
| Construction | -2.1% | 2.4% | -3.5% | -12.3% | -6.4% | 0.2% | -28.8% |
| MFG IP | 0.5% | -1.9% | -0.3% | -6.9% | -2.2% | 2.2% | -6.1% |
| MFG Orders | -2.9% | -1.4% | -1.7% | -21.7% | -14.6% | -8.4% | -15.4% |
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.
