German Orders Thrust to Acceleration by International Forces

Foreign orders have been trying to pull total German orders higher for some time now. In September both foreign and domestic orders show solid increases with overall orders rising 4.2% month-to-month foreign orders rising 4.4% and domestic orders rising 3.6%. Sequentially, however, it's foreign orders that really stepped to the fore. The overall order pattern shows acceleration with growth going from 1% over 12-months, to a 9.8% annual rate over six-months, and rising further to a 10.2% annual rate over three-months. However, this result is substantially driven by foreign orders which rise by 0.8% over 12-months, advance at a 10.2% annual rate over six-months, and then spurt at a 35.1% annual rate over three-months. The impact on overall orders is blunted by domestic orders that began to seriously lag over three-months. The 12-month growth of domestic orders is 1.5%, over 6-months they perk up to a 9% annual rate, in line with foreign orders. But over three-months domestic orders fall at nearly an 18% annual rate, a stunning departure from the acceleration in foreign orders.

Real Sales - Sales do not show the same kind of turn around. For manufacturing and mining real sales fall by 4.2% over 12-months, contract at 5.7% annual rate over six-months, and contract at 3.3% annual rate over three-months. The pattern for manufacturing is similar. Individual industries show little guidance as far as illuminating acceleration or deceleration, since the sector changes remain chaotic. Not only do the sectors failed to show clear trend developments, they don't even grow or shrink consistently over 12-months, six-months, and three-months. The sales picture in Germany is quite confusing.

European Industrial Confidence - Measures of industrial confidence show consistent negative values in September for Germany, France, Italy, and Spain. All of them show deterioration compared to August except Spain where there's an improvement to -0.9 from -3.6 in August. Spain shows improvement over four months in a row on this score. Looking at the sequential values for industrial confidence, the German average is declining consistently, from 12-months, to six-months, to three-months; the same trend is implied for Italy. France shows little-change but logs consistent negative readings while Spain shows negative readings of diminishing intensity as the sequence that moves toward improvement.

QTD - Quarter-to-date data are now for the just completed third quarter. German orders show clear strong accelerations on this basis. Real sales across sectors show weakness and declines. Economic indicators are presented as rankings; all show below-median standings (below 50%) except Spain that shows a solid-strong 73.7 percentile standing for industrial confidence-and stands by itself in this grouping.