Global| Sep 09 2006July Industrial Production Expands in Germany & Hungary; Industry Remains Pillar of Growth
Summary
We hear so much about the development of industry in various Asian nations that it's sometimes easy to think that industry elsewhere is shriveling up and fading away. This is hardly the case, as a quick look at new production data for [...]
We hear so much about the development of industry in various Asian nations that it's sometimes easy to think that industry elsewhere is shriveling up and fading away. This is hardly the case, as a quick look at new production data for Germany and Hungary can show.
Industrial production increased 1.2% in Germany in July, far more than forecast survey expectations that called for 0.5%. Analysts apparently expected June's 0.4% decline to be reversed, but not exceeded, as it was. The year-on-year growth also more than reversed its prior month's performance, surging to 4.7% from a drop of 1.2%. Since the present expansion began in mid-2003, German industrial production has grown at a 3.5% annual rate.
In Hungary, production increased 1.1% in July, a third consecutive gain after a minor dip in April. The year-on-year advance is 12.2%. Growth there since early 2004 has averaged 8.7%. These figures cover firms with five or more employees; the total dataset for July will be out September 15.
In both of these countries, the strength has come in more industrial products than in consumer goods. Germany reports details on the "market groupings" of its production, and during this latest 30-month recovery period, intermediate products have averaged 4.9% annualized growth, capital goods 5.5% and consumer goods 1.5%. July's industry performance over a year ago was above average for chemicals, rubber & plastics, metals, machinery, electrical equipment and transport equipment. A similar pattern obtained in Hungary in its full dataset through June, with the addition of the mining sector, leather goods and "not elsewhere classified", which includes furniture.
Thus, while consumer goods production, particularly nondurable goods, may have shifted to other geographic regions, "heavy industry" still appears to be firmly ensconced in Europe. In fact, in both Germany and Hungary, production of these industries is a major source of growth for the entire economy.
| Industrial Production* | July 2006 | June 2006 | May 2006 | Year Ago | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|---|
| Germany, 2000=100 | 109.5 | 108.2 | 108.6 | 104.6 | 104.1 | 101.7 | 98.0 |
| % Change | 1.2 | -0.4 | 1.5 | 4.7 | 2.4 | 3.7 | 0.1 |
| Hungary, 2000=100 | 148.4 | 146.8 | 143.9 | 133.0 | 132.0 | 122.9 | 114.4 |
| % Change | 1.1 | 2.0 | 1.6 | 12.2 | 7.4 | 7.5 | 6.6 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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