Global| Apr 11 2012IP Trends Ramp Lower Across Zone
Summary
Industrial production is slowing on a broad front across the Euro-Area. In February five of seven bellwether Euro-Area or EU nations had declines in their production indices over three-months; the best of their performance is flat. [...]
Industrial production is slowing on a broad front across the Euro-Area. In February five of seven bellwether
Euro-Area or EU nations had declines in their production indices over three-months; the best of their performance
is flat. For the quarter to date only Spain with well-known volatile moves is stronger on balance.
The chart tells a clear story of steady decline. The year-over-year growth rate for industrial output for Germany, France, and Spain is clearly on a downward path. Only Germany with a Yr/Yr increase of 0.9% is up on the year. The same is true for the broader sample of countries in the table.
EMU is clearly on a weakening trend. There is no evidence that it has abated and at the same time there are new concerns about debt problems in the Euro-Area.
The silver lining in this ugly cloud is that the 3-month annualized rates of growth are generally smaller than the six-month rates. That says that the deterioration while still in place is not accelerating and actually has tapered off a bit. But it is small grounds for hope. There is literally no source of stimulus in the Euro-Area. The ECB is running an accommodative policy aimed at assisting the indebted. Fiscal austerity is the rule of the day across the Zone. There is no stimulus and momentum, as you can see is clearly negative. Meanwhile, new strains are emerging.
| Selected Euro-Area Countries and UK IP in MFG | |||||||
|---|---|---|---|---|---|---|---|
| Mo/Mo | 3Mo | 6Mo | 12Mo | Feb'12 | |||
| MFG Only | Feb'12 | Jan'12 | Dec'11 | Feb'12 | Feb'12 | Feb'12 | r:2-Date |
| Germany: MFG | -0.3% | 1.0% | -1.9% | -4.8% | -6.7% | 0.9% | -2.7% |
| France | 0.3% | 0.2% | -1.5% | -3.8% | -3.8% | -1.9% | -1.3% |
| Spain | -3.8% | 2.8% | 1.1% | 0.0% | -7.6% | -6.8% | 6.3% |
| Ireland | -3.2% | 0.8% | 2.5% | 0.0% | -19.9% | -3.1% | -0.5% |
| Greece | -2.7% | 3.5% | -2.3% | -6.2% | -8.6% | -8.0% | 0.0% |
| Porttugal | 0.8% | 0.1% | -1.4% | -1.8% | -16.5% | -6.8% | 0.0% |
| UK: MFG | -1.0% | -0.3% | 1.2% | -0.8% | -2.5% | -1.5% | -0.5% |
| Mo/Mo are simple percent changes others are at SAARs; IP X-construction unless noted | |||||||
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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