Global| Aug 06 2007Italy’s IP Growth Sinks
Summary
Unlike the strength in UK IP in June or the sharp rise in orders in Germany, Italys MFG sector is showing a broad-based slowing. Italys three-month growth rates by sector tell the story of a slowdown across the board. Overall IP [...]
Unlike the strength in UK IP in June or the sharp rise in orders in Germany, Italy’s MFG sector is showing a broad-based slowing.
Italy’s three-month growth rates by sector tell the story of a slowdown across the board. Overall IP remains in a declining mode for both 3-month and 6-month growth rates and these are both much weaker even than its Y/Y decline. The consumer sector in Italy shows an accelerated decline in the output of both consumer durables and nondurable goods.. One minor exception is the three-month bounce back in intermediate goods, up by 2.1% over three months but still showing a six-month rate of decline of 3.4%. Transportation is the counter-trend sector with output up by a strong 9.5% over three months and up by 0.7% over six months; its Yr/yr pace stands at 4.2%.
Italy has been showing more irregularity than other Euro area countries for some time. While German industrial measures like its IFO survey show that Germany is well off peak, other measures like German orders (issued today) still show a lot strength - even acceleration. But Italy, one of the weaker EMU countries in terms of its competitiveness is showing its wear and tear more regularly. I wonder if this is the way the strong euro will undermine the Euro area, by gnawing away at its weakest members first…
| SAAR except m/m | Jun-07 | May-07 | Apr-07 | 3-month | 6-month | 12-month |
| IP-MFG | -0.7% | 0.6% | -1.0% | -4.4% | -5.5% | -0.3% |
| Consumer Goods | -1.5% | 0.3% | -2.0% | -11.8% | -9.7% | -3.5% |
| Capital Goods | -1.0% | 1.2% | -2.1% | -7.3% | -4.9% | 1.2% |
| Intermediate Goods | 0.4% | 0.8% | -0.7% | 2.1% | -3.4% | 0.6% |
| Memo: Transportation | 0.2% | 5.5% | -3.2% | 9.5% | 0.7% | 4.2% |
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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