Global| Dec 05 2008German Orders Sink Fast – So Much for a Mild Impact on Europe
Summary
German new MFG orders dropped 6.1% in October from September. In September they fell 8.3% from August. The party is over. Foreign orders are falling faster overall but in the month domestic orders almost caught up in pace with foreign [...]
German new MFG orders dropped 6.1% in October from September. In September they fell 8.3% from August. The party is over.
Foreign orders are falling faster overall but in the month domestic orders almost caught up in pace with foreign weakness: compare -6.2% to -6.1%. In the new quarter domestic orders are falling at a 40.1% pace while foreign orders are falling at a 55.3% pace. Both are horrific numbers. Whatever skepticism Europeans have had about this slowdown or its ability to reach out and sting them too, those reservations should now be gone. Europe is being led lower by Germany and at a very rapid pace.
Sales in Germany are now all on negative trends for the quarter. Orders have been pared even more dramatically than sales reflecting the forward-looking creatures that they are. The economy is spiraling lower at a rapid pace. The ECB does have more room to cut rates than the Fed but we have seen that amounts to pushing on a string. The US is gearing up for more fiscal stimulus. Meanwhile, the last we heard from German Chancellor Merkel, she was against getting into a stimulus race. She may be right about that, but that is no excuse not to ‘run’ at all.
| German Orders and Sales By Sector and Origin | ||||||||
|---|---|---|---|---|---|---|---|---|
| Real and SA | % M/M | % Saar | ||||||
| Oct-08 | Sep-08 | Aug-08 | 3-MO | 6-Mo | 12-Mo | Yr Ago | QTR-2-Date | |
| Total Orders | -6.1% | -8.3% | 3.5% | -36.8% | -20.5% | -17.3% | 11.2% | -48.2% |
| Foreign | -6.2% | -11.6% | 4.3% | -44.3% | -25.4% | -22.7% | 17.0% | -55.3% |
| Domestic | -6.1% | -4.7% | 2.8% | -28.2% | -15.2% | -11.3% | 5.2% | -40.1% |
| Real Sector Sales | ||||||||
| MFG/Mining | -0.2% | -4.3% | 4.5% | -0.7% | -0.3% | -3.4% | 6.9% | -9.4% |
| Consumer | -0.1% | -1.2% | 2.0% | 2.8% | 1.4% | -3.5% | 2.3% | -1.4% |
| Consumer Durables | -0.6% | -6.2% | 6.8% | -1.7% | -0.9% | -4.9% | -0.2% | -15.2% |
| Consumer Non-Durable | 0.0% | -0.2% | 1.2% | 4.0% | 2.0% | -3.3% | 2.9% | 1.6% |
| Capital Goods | 0.7% | -5.4% | 5.7% | 2.8% | 1.4% | -3.3% | 9.7% | -7.0% |
| Intermediate Goods | -1.2% | -4.5% | 4.2% | -6.4% | -3.3% | -3.2% | 6.1% | -15.9% |
| All MFG-Sales | -0.1% | -4.2% | 4.4% | -0.3% | -0.2% | -3.3% | 6.4% | -8.8% |
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
