Global| Sep 24 2008Germany Shows Extreme Weakness Like the Rest of Europe
Summary
The IFO sector readings are plunging and the overall indices are weak as well. In September the business expectations index remains in the lower 13 percentile of its range. The current situation is mid range at the 51st percentile. [...]
The IFO sector readings are plunging and the overall indices are weak as well. In September the business expectations index remains in the lower 13 percentile of its range. The current situation is mid range at the 51st percentile. But sector readings are deteriorating with manufacturing, wholesaling and retailing falling especially sharply in just the past few months.
Moreover, all of euro is beginning to show this same sort of malaise. Yesterday the Bank of Belgium index fell from 5.9 in August to14.4 in September. Italian business confidence released today registered its lowest reading in seven years. French business confidence, another morning release, fell to its lowest mark in over five years.
The German IFO reading is only the lowest in three years. But this year’s low in expectations sub index is the lowest since 1993. With the recent surge in oil prices and mini jump in the euro Europe has a lot on its plate to worry about. If Europe escapes recession it will be nothing short of a miracle.
| Summary of IFO Sector Diffusion readings: CLIMATE | ||||||||
|---|---|---|---|---|---|---|---|---|
| CLIMATE Sum | Current | Last Mo | Since Jan 1991* | |||||
| Sep-08 | Aug-08 | Average | Median | Max | Min | Range | % range | |
| All Sectors | -14.8 | -11.1 | -6.6 | -9.8 | 16.8 | -26.3 | 43.1 | 26.7% |
| MFG | -11.6 | -6.8 | 3.5 | 3.8 | 27.2 | -22.6 | 49.8 | 22.1% |
| Construction | -25.2 | -26.4 | -32.8 | -38.8 | -7.9 | -50.5 | 42.6 | 59.4% |
| Wholesale | -10.3 | -5.5 | -9.9 | -14.5 | 23.5 | -39.4 | 62.9 | 46.3% |
| Retail | -24.0 | -21.5 | -20.3 | -20.5 | 1.2 | -39.6 | 40.8 | 38.2% |
| Services | 8.3 | 7.7 | 10.7 | 9.5 | 28.5 | -15.7 | 44.2 | 54.3% |
| * May 2001 for Services | ||||||||
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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