Global| Nov 07 2007German Mfg IP Turns its Trend Higher Unexpectedly
Summary
Most recent German reports have shown some weakening trends especially the new industrial orders. But in September IP itself was strong even as the outlook was weakening. The strength in output is mostly in capital goods where output [...]
Most recent German reports have shown some weakening trends especially the new industrial orders. But in September IP itself was strong even as the outlook was weakening. The strength in output is mostly in capital goods where output is rising at a 12.5% pace in Q3, quite heated. Compare that to a 0.3% annual rate of increase for consumer goods in the quarter. For the moment intermediate goods output is strong, up at an 8.9% pace. The last three months show a real push in output that contrasts sharply with the weakness we have seen in new orders. This could be the turning point for German growth. Even the IFO report shows German MFG turning toward slower, not faster, growth. IP seems to be a lagging indicator in this process.
| German Industrial Production | |||||||
|---|---|---|---|---|---|---|---|
| Saar except m/m | Sep-07 | Aug-07 | Jul-07 | 3-mo | 6-mo | 12-mo | Quarter-to-Date |
| IP total | 0.3% | 1.9% | 0.2% | 9.7% | 5.5% | 6.1% | 8.5% |
| Consumer | -0.3% | 4.2% | -1.3% | 10.6% | 0.6% | 3.6% | 0.3% |
| Capital | 0.1% | 1.6% | 1.3% | 12.5% | 7.9% | 8.3% | 12.5% |
| Intermediate | 0.2% | 1.5% | -0.1% | 7.0% | 5.1% | 7.1% | 8.9% |
| Memo | |||||||
| Construction | 0.7% | 2.0% | 0.9% | 15.6% | -7.6% | -2.4% | 4.9% |
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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