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Economy in Brief

IFO Follows Zew Lead And Pops
by Robert Brusca April 23, 2010

IFO surges: Germany’s IFO indicators are rising very sharply in April. The biz climate index lies 6.5% above its average; the Biz expectations index lies some 8.2% above its average mark as well. Biz expectations a positioned in the 94.5th percentile of their range, an extremely high standing, while current conditions are only at the 51.2 percentile’ just above the mid-point.

Sectors are strong: Services, retailing, and MFG sectors all are advancing with retailing making a strong move in the past month after having languished badly. The MFG sector is driving higher at a consistent and vibrant pace.

Report aligns with strength elsewhere despite irregularities in e-Zone - The IFO report reinforces the strong readings earlier by the Zew survey of financial experts. It is a survey for April and is very up-to-date. e-Zone orders though March were released today and were also quite solid. The UK, however, reported a somewhat disappointing Q2 GDP gain. Greece threw in the towel and asked for aid. Obviously the EU/EMU is a melting pot of differing economic circumstances.

Strength seems to dominate worries: For now the good news is that the German economy is firing on all cylinders. The MFG sector continues to be strong and the retailing sector has started to show some strong gains at long last. The Markit indices on services and MFG were not just up in April, but were up strongly. On the back of that strong report from Markit we can conclude that the growth prospects for Europe are looking up despite the irregularities and challenges it faces.

IFO Survey: Germany
  Percent: Yr/Yr INDEX NUMBERS
Curr/Avg Percentile
Biz Climate 21.5% 19.6% 15.2% 15.5% 14.8% 101.6 98.2 106.5% 72.8%
  Current Situation 19.4% 14.5% 6.5% 5.3% 2.1% 99.3 94.5 104.6% 51.2%
  Biz Expectations 23.8% 24.8% 24.4% 26.8% 28.9% 104.0 102.0 108.2% 94.5%
Average & Range Since Jul-92
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