Global| Feb 08 2011German IP Shows Split Trends
Summary
Not surprisingly German orders and IP show similar characteristics. In the orders report capital goods are strong and consumption orders are weak. For the IP it is the same relative configuration, but with even weaker trends for [...]
Not surprisingly German orders and IP show similar characteristics. In the orders report capital goods are strong and
consumption orders are weak. For the IP it is the same relative configuration, but with even weaker trends for intermediate goods.
German IP has slowed sharply. Its Yr/Yr growth is now at 10% capital goods output is still raging strong at 20%. And capital goods output is accelerating. But overall output is losing steamed as growth has gone from 9.9% over 12-months to 3.5% over six months to 2.7% over three months. Consumer goods output is declining at an accelerating pace and intermediate goods output is too. Capital goods strength is not enough to keep overall IP accelerating.
Despite the clear erosion in output, orders have had a revival after a period of slowing. So it is not certain that there is any trend in German output that we need to be worried about. The orders series is expected to be more of a leading indicator and its revival in December may signal that he drop off in the pace of output is temporary.
| Total German IP | |||||||
|---|---|---|---|---|---|---|---|
| SAAR Except M/M | Dec-10 | Nov-10 | Oct-10 | 3Mo | 6Mo | 12Mo | Quarter- 2-Date |
| IP total | -1.5% | -0.6% | 2.8% | 2.7% | 3.5% | 9.9% | 7.7% |
| Consumer | -1.3% | -0.8% | 0.3% | -6.8% | -1.2% | 0.4% | -2.1% |
| Capital | 3.3% | -0.5% | 4.6% | 33.5% | 20.5% | 20.8% | 26.9% |
| Intermed | -3.1% | -0.4% | 1.9% | -6.4% | -2.2% | 11.3% | 0.6% |
| Memo | |||||||
| Construction | -24.1% | -1.5% | 3.1% | -64.8% | -40.0% | -18.2% | -23.0% |
| MFG IP | -0.1% | -0.5% | 2.7% | 8.5% | 7.0% | 13.1% | 10.3% |
| MFG Orders | -3.4% | 5.2% | 0.0 | 14.6% | 2.8% | 19.5% | 11.2% |
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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