Global| Nov 10 2008IP Dropping Fast in Key EMU Countries
Summary
EMU IP is sinking fast. Add Italy and France to the list of large EMU countries with industrial output dropping like a stone. The Q3 growth rates for IP in France and in Italy each are negative, Italy’s drop is at a huge -8.4% pace [...]
EMU IP is sinking fast. Add Italy and France to the list of large EMU countries with industrial output dropping like a stone. The Q3 growth rates for IP in France and in Italy each are negative, Italy’s drop is at a huge -8.4% pace while France’s drop is a still weak at -2.7%. In Italy consumer goods, capital goods and intermediate goods output each is falling. Transportation is twice as weak in Italy as it is in France for the quarter. In France intermediate goods output is even a bit weaker than it is in Italy in Q3 but the drop in output of capital goods is quite a bit less severe and consumer goods output in France continued to rise strongly in Q3. French consumer goods output, in fact, has risen in each month of the third quarter as well.
On balance, as the accompanying chart shows, IP is falling rapidly in Germany, Italy and France. The drop in France shows some signs of leveling off in its pace of decline over the past few months while Italy and Germany are still plunging at what seem to be accelerating rates of decline. Italy ’s pattern of decline is a bit more complicated than that for Germany and France. But Germany has the most severe weakness. While it has so far the smallest Yr/Yr drop, its output has decelerated more sharply since German output was growing so much more strongly until early 2008 when the pace of increase suddenly and sharply moved lower and into a state of decline.
| French IP Excluding Construction | |||||||
|---|---|---|---|---|---|---|---|
| Saar except m/m | Sep-08 | Aug-08 | Jul-08 | 3-mo | 6-mo | 12-mo | Quarter-to-date |
| IP total | -0.5% | -0.4% | 1.3% | 1.6% | -4.2% | -1.9% | -2.7% |
| Consumer | 0.4% | 0.1% | 1.5% | 8.2% | 2.8% | -0.4% | 6.2% |
| Capital | 0.7% | 0.0% | 0.3% | 4.2% | 0.5% | 1.7% | -3.8% |
| Intermediate | -1.5% | -0.8% | 1.3% | -4.1% | -7.2% | -4.4% | -5.0% |
| Memo | |||||||
| Auto | -3.1% | -1.2% | 4.2% | -1.3% | -14.8% | -8.3% | -9.3% |
| Italy IP Excluding Construction | |||||||
| Saar except m/m | Sep-08 | Aug-08 | Jul-08 | 3-mo | 6-mo | 12-mo | Quarter-to-date |
| IP-MFG | -2.3% | 0.4% | -1.3% | -12.1% | -8.0% | -5.7% | -8.4% |
| Consumer | -3.3% | 0.8% | -2.3% | -18.0% | -6.5% | -5.4% | -10.4% |
| Capital | -2.5% | -0.9% | -0.5% | -14.9% | -11.1% | -8.2% | -13.7% |
| Intermediate | -2.6% | 1.1% | -0.3% | -7.2% | -5.9% | -5.4% | -3.5% |
| Memo | |||||||
| Transportation | -5.7% | 1.9% | -3.9% | -27.2% | -21.1% | -13.1% | -22.4% |
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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