Global| Sep 19 2011Slowdown in Orders is Broad-Based
Summary
German orders are slipping. So are orders in Spain. The monthly data are choppy but the trends are clearer. By comparison the US order-flow is holding up and has steadied. The German orders profile is the most extreme because Germany [...]
German orders are slipping. So are orders in Spain. The monthly data are choppy but the trends are clearer.
By comparison the US order-flow is holding up and has steadied.
The German orders profile is the most extreme because Germany came into the post financial crisis period with the strongest rebound and has since begun to lose momentum. Spain’s orders recovered from their recession trough as well but did not post the degree of strength in the recovery of Germany. The US has been a middle case. Still, many US indicators are losing momentum. Compared to the best of the Zone and one of the most troubled countries in the Zone US orders are holding up quite well. But it is unclear how long this can last
At the over-the-weekend European meeting that came ahead of the IMF/World Bank/G-20 meeting, the European finance ministers seemed to decide that further action was out of their hands.
Despite a seeming statement of solidarity from key European leaders last week Merkel, Sarkozy and Papandreou, the Euro-Area seems on a path to give Greece the right to sink or swim left to its own devices. No new ECB support has been offered; no new slack has been cut. The Germans see monetary policy as the wrong solution. Greece complains that it is being made a scapegoat for European leadership and debt issues. That is where we stand ahead of this week’s international meetings.
The imbroglio is affecting growth in all of the Zone as onlookers are wondering how bad it will get and if contagion will sweep through the Zone.
Faltering orders are just one sign of the encroaching weakness. Europe’s decision to fight fire with inaction hardly seems to be a bold act that will bring success.
| Euro-Area EU US Industrial Orders & Sales Trends | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| SAAR Except M/M | % M/M | Jul 11 |
Jul 11 |
Jul 11 |
Jul 10 |
Jul 09 |
Q:2:D | ||
| Euro-Area Detail | Jul 11 |
Jun 11 |
May 11 |
3Mo | 6Mo | 12Mo | 12Mo | 12Mo | SAAR |
| Germany: | -3.0% | 1.4% | 1.9% | 1.0% | 5.8% | 11.0% | 22.3% | -23.8% | -8.5% |
| Spain | 0.9% | -4.4% | 2.7% | -3.7% | -6.2% | 5.2% | 5.0% | -25.9% | -7.3% |
| US factory Orders | 2.4% | -0.4% | 0.6% | 10.8% | -2.8% | 10.6% | 12.9% | 13.9% | 14.6% |
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.
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