Economy in Brief

The overall assessment of EMU-wide IP is not yet possible. But a slew of early reporters (eight in this table) along with two northern European countries have issued reports on manufacturing production in February. They are mixed in February with four up, and four down. January has five ups and three downs. December has five down and three up. So, the numbers cluster around 50-50 with some variation. The Northern European countries are showing monthly gains except for Norway in December.

The sequential trends showing growth rates over three months, six months, and 12 months, show three EMU nations with output falling and five increasing over three months, then four have output up and four down over six months. Over 12 months, five countries have output down and three with output up. The sequential growth rates do show a trend toward having more nations with expanding output. Germany, Finland, and Greece show decline on all three horizons. France shows output declines over six months and 12 months while Spain shows a decline only over 12 months. The northern European countries of Sweden and Norway log increases on all horizons.

From 12-months to 6-months to 3-months, the EMU median reading steadily progresses to a stronger reading. The median change at an annual rate is -0,7% over 12 months, -0.3% over six months and +3.0% over three months. Monthly data do not give a ‘clear look’ at trends. In December, the median output change on month-to-month data is -0.7%, which shifts sharpy to a gain of 0.9% in January. February saw the median also post an increase, a bit weaker than January at 0.3%. Still, it was an increase, and it was better than the December rate of -0.7%.

Japan’s confidence is still weak and in a down cycle. Since reaching a sharp peak early in 2024, confidence continues to recede. All components are showing decline on all horizons from 12-months to 6-months to 3-months. This is an extremely uniform response.

Consumer confidence has a 15-percentile standing on data back to 2004. Components of the confidence index has standing that range from a standing at the 47.8% mark for the valuation of assets to a low at the 6.1 percentile mark for willingness to purchase durable goods.

In keeping with this weakness, the overall livelihood standing is at its 10.2 percentile.

Japan’s Economy Watchers Index saw its current and future indexes fall and indicated contraction in March. We can only imagine the knock-on effects of impending U.S. tariffs on these perceptions and expectations in the months ahead.

As it stands, Japan’s economy watchers survey show month-to-month attitude deterioration in their diffusion responses up and down the line. For the current conditions survey, entries erode except for eating & drinking places, manufacturers, and services. For the future index, all the responses are weaker month-to-month except for housing, corporations, and manufacturers.

In terms of percentile standings on survey responses from March 2004 to date, only one category in the current or future services, current manufacturers, has a reading above the 50% mark making it the lone response above its historic median on this timeline. It achieves this ‘milestone’ with a diffusion reading of 47.8, that nonetheless indicates contraction. Manufacturers also have the highest diffusion ranking in the future survey but at the below median 46.2 percentile mark; the topical diffusion reading of 47.4 indicates ongoing contraction.