Global| Jul 07 2011German IP Springs Back to Life
Summary
German IP sprang back to life in May jumping by 1.2% and more than making up for its drop of 0.8% in April. Still IP growth is slowing it has slipped from 7.5% over 12-months and from even stronger six months result to 6.3% annualized [...]
German IP sprang back to life in May jumping by 1.2% and more than making up for its drop of 0.8% in April.
Still IP growth is slowing it has slipped from 7.5% over 12-months and from even stronger six months result to
6.3% annualized over the recent three-months.
In the chart we can see that all the major IP categories are on sliding profiles except for consumer goods. While the consumer goods sector is still the weakest of the three main sectors, it is still showing the steadiest Yr/Yr growth. The table shows that for capital goods its sequential growth rates for growth from 12-months and in have been quite stable although at a pace that is a slower rate of growth for that sector than in the past.
It may well be that the German economy has been through some gear shifting and now is stabilizing. It may be that the consumer sector has finally risen in prominence and will help to support growth better in the months ahead. Right now that story is consistent with the facts.
But lurking in the background the ECB has just raised rates for the second time in this expansion. We know that the German people are unhappy about the bailing out of Greece and how the various debt negotiations are going in the Euro-Area. These concerns may not dampen their own spirits when it comes to spending. But as we have seen, orders from overseas are slowing and while overall factory orders are growing stronger than factory output in Germany there are still a lot of questions for Germany about the future.
| Total German IP | |||||||
|---|---|---|---|---|---|---|---|
| SAAR Except M/M | May-11 | Apr-11 | Mar-11 | 3Mo | 6Mo | 12Mo | Qtr-2-Date |
| IP total | 1.2% | -0.8% | 1.2% | 6.3% | 9.5% | 7.5% | 5.5% |
| Consumer | 0.0% | 0.3% | 1.4% | 7.1% | 7.6% | 4.8% | 7.9% |
| Capital | 2.5% | -1.1% | 1.7% | 12.6% | 12.0% | 12.2% | 10.2% |
| Intermed | 0.7% | 0.3% | 0.3% | 5.7% | 11.5% | 7.5% | 6.7% |
| Memo | |||||||
| Construction | 1.1% | -5.0% | 5.5% | 5.7% | 15.5% | 8.8% | 0.4% |
| MFG IP | 1.3% | -0.3% | 1.1% | 8.8% | 11.2% | 8.9% | 8.5% |
| Real MFG Orders | 1.8% | 2.9% | 0.0 | 7.9% | 6.6% | 12.2% | 12.8% |
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.
More Economy in Brief
