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Monday, July 07, 2008

Oops, There Goes German Mfrg

A huge swing on May. Output falls 2.4%, adjusted seasonally and on pricing. A 1.5% decline YoY:
Production plant and machinery fell 3.9 percent in May, while consumer goods output declined 1.4 percent. Construction output gained 1.1 percent in the month.
Adding to evidence of slowing growth, German manufacturing orders declined for a sixth straight month in May. Exports probably stalled in May. European manufacturing contracted in June, confidence dropped and retail sales plunged.

Plant and machinery orders fell the most in over three years in June, the Frankfurt-based VDMA machine makers' association said on July 2. Domestic and export orders both declined 12 percent from a year earlier, it said.
Rough. The UK is seeing manufacturing slump as well:
The global slowdown is rippling through Europe's economy as inflation accelerates and higher credit costs drag down house prices in parts of the region. The U.K., Spain and Ireland are close to recessions and evidence is mounting that Germany, an engine of European growth since financial markets seized up last year, is also starting to slow. ``The writing had been on the wall for the U.K. for a while and now the combination of tighter lending conditions and high inflation is bringing the rest of Europe down with it,'' said James Nixon, an economist at Societe Generale SA in London. ``We're heading for a sharp slowdown.''
This isn't good news for Japan, either. I would say that Spain and Ireland are in recession, and the UK appears sure to follow.

Commodities are generally down. Oil is falling. If you look at the graph at the top, Mar-Apr crude supplied to US markets is back down around the 01/02 levels. Not very good at all, because if US consumers can't buy oil at these prices, a lot of other populations will be constrained also. US heating oil futures are down around 3%.

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