Global| Jan 13 2010Industrial Output Is Making Continued Gains In Europe
Summary
Europe’s recovery remains on track in November as industrial production has risen in all the large EMU states. The UK, an EU member, only saw a very minor set back to MFG IP with output dropping by 0.1% in November. Of the largest EMU [...]
Europe’s recovery remains on track in November as industrial production has risen in all the large EMU states. The UK, an EU member, only saw a very minor set back to MFG IP with output dropping by 0.1% in November. Of the largest EMU states, the rise in the Italy was disappointing at just 0.2%. The UK’s small drop actually out did expectations.
Year-over-year the IP drops have been trimmed to the range of -4% to -10% for this group of countries. Despite the set back to UK IP in November at -5.4% it demonstrates one of the smaller Yr/Yr drops in IP and exhibits a strong improvement from its result in October (-7.8%, Yr/Yr). All large countries show an improvement in their Yr/Yr drop in November compared to October and for most the difference is large.
The chart above shows how strong the recoveries have been. Despite all that strength over the last 3- and 6-months, 2009 has been a very bad year for Europe.
German GDP is just reported to have posted an outsized drop of 5% in 2009 as its exports and investment goods sectors were hard hit. As it was, government programs produced a boost that kept the steep GDP decline from being even larger. Public consumption rose by 2.7% from 2008 while private consumption edged ahead by just 0.2%.
The recovery in IP is however a good development. Germany’s industrial sector depends on exports which fell by 14.7% in 2009. Exports have begun to get traction again and IP is on the rise as a result. 2010 promises to be a much better year, but then 2009 put all of Europe in a very deep hole and the real question is not 'Will 2010 be better?' but, 'How much better will 2010 be?' That is not yet resolved and is a point of some contention. So far, good strong growth is in train and seems to have staying power. Perhaps more optimism is warranted.
| Main Euro-Area Countries and UK IP in MFG | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Mo/Mo | Nov 09 |
Oct 09 |
Nov 09 |
Oct 09 |
Nov 09 |
Oct 09 |
||||
| MFG Only | Nov 09 |
Oct 09 |
Sep 09 |
3Mo | 3Mo | 6mo | 6mo | 12mo | 12mo | Q:4 Date |
| Germany: | 0.8% | -1.8% | 3.6% | 10.6% | 16.6% | 9.1% | 18.6% | -9.1% | -13.7% | 8.0% |
| France: IPxConstruct'n |
1.1% | -0.6% | -1.2% | -2.6% | 4.2% | 6.1% | 8.6% | -3.8% | -8.0% | 0.5% |
| Italy | 0.2% | 1.0% | -5.2% | -15.3% | 6.4% | 7.0% | 5.9% | -10.2% | -13.2% | -2.6% |
| Spain | 1.2% | -3.0% | 0.5% | -5.5% | -20.2% | 17.9% | -0.2% | -3.9% | -13.0% | -14.2% |
| UK: EU member | -0.1% | 0.0% | 1.6% | 6.1% | -1.8% | 0.9% | -0.4% | -5.4% | -7.8% | 1.6% |
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
