APRIL 2009
Economic Sentiment Indicator edges modestly despite historical low orders in the manufacturing sector month
FRANCE’s Economic Sentiment Indicator rose a modest point to 74.5 compared with the previous month while the Euro area’s picked up as well as the EU 27 leaving behind their worst performances since the index was created in 1985. In Germany, the index performed similarly to France’s but Spain’s gained significant improvement, up four points to 71.9. Italy performed best as its ESI increased six and a half points to 73.5 followed by the UK’s, up five points to 51.1, along with Denmark’s to 67.9 points despite record low sub indices. Poland’s ESI rose four points to 78.2 Six member states dropped on average two to three points and observed historical lows : Sweden, Latvia, Austria, Portugal, Slovenia and Slovakia.
France’s Industrial Confidence Indicator similarly to the country’s ESI rose, but more significantly, six points to -33 (from -39). Each the Euro area and the EU 27 indices reflected member states revived optimism, up three points respectively despite rock bottom industrial investments indices in value for the April year-on-year period: France dived to -16 from -4. Despite such grim environment, France’s production expectations surged five points, to -24 (from the previous month -29) while the Euro area’s jumped to -25 (from -32 and the EU 27 to -27 (from -35). Germany’s also gained five points to -33, the UK’s to -40 (from -54) jumped 14 points, Spain’s to -18 (from -30), the Netherlands to -11 (from -21) Romania’s improved to -8 from -16, and the Czech Republic’s to -14 (from -24). East European member states observed some deteriorations which led to record lows in Lithuania to -62 (from -58) in Latvia to -35 (from -29) and in Hungary to-48 (from -47).
By contrast, order books’ improvement in France, up five points to -61 from the previous month -67, justified renewed confidence, and similarly in the Euro area to –60 and in the EU 27 to –59. In Germany, order books remained unchanged at -59 points but in the UK, orders rose to -59 from -63. Historical lows were recorded in Denmark, Slovenia, and Portugal. Stocks of finished products in France bettered to 16 from 21 due to sales but stagnated in the EU 27 while falling a mild point in the Euro area. Germany’s rose one point to 28. Record high stocks were observed in the UK at 33 points (from the previous month
32), stable in Spain at 30 points and in Finland at 15. Stocks in Italy decreased by two points to 6 from 8.
Production trends observed in recent months reflected slow motion: France’s improved one mild point to -45 (from -46 in March) and in the Euro area to -44 (from -46) as well as in the EU 27. In Germany, production picked up to -40 (from -45), along with Spain to -45 (from -51) and in the UK to -48 (from -54). In Italy, production worsened to -61 (from -60). A total nine countries recorded near frozen production trends: Sweden’s dived to -39 (from -30) the Netherlands to -48 (from -37) Malta’s stagnated at -39, Lithuania’s plunged to -63 (from -67),and Greece’s to -53 (from -47). Export order books remained modest demonstrating that intra EU trade accounted for a large part for the beginning of a slight economic upturn. France’s rose to -72 (from -75), the Euro area to -63 (from -62) and the EU 27 to –59 (from -60). Germany’s worsened to -60 from -57 while the UK’s rose to -42 from -53 as the pound devaluation rendered cost and thus orders more affordable to buyers. In Hungary by contrast, export order books fell to -66 (from -60) while Spain recorded a historical low at -59 and for the second consecutive month.
Eight other member states performed equally to Spain, (Slovenia, Poland, Austria, the Netherlands, Latvia, Cyprus, and Denmark) and even anticipated on further deteriorating export order books.
As a result, employment expectations in the manufacturing industry rose among the less impacted by declining foreign orders among which France to -47 (from -49) and the UK to -43 (from -49) but also on the underperformers including Spain to -35 (from -39) and Italy to -25 from -28. As a result, the Euro area’s index edged up modestly to –37 (from –38) and the EU 27 to -39 (from -41). Historical lows were however recorded in four member states. To maintain a modest momentum jump start, selling price expectations, slashed in previous months, were thus cut further. France’s indicator fell to -8 from -11 and recorded its fourth consecutive drop while the Euro area’s dropped two points to –12 (from –14) while the EU 27 stayed unchanged at –13. Prices in Germany fell more modestly, to -11 (from -13), Italy’s climbed to -11 (from -13) Spain’s plunged to -19 (from -11)and the UK’s to -20 (from -10). Record low prices were observed in Romania, Latvia, and Bulgaria.
Paradoxically however, the capacity utilization in the manufacturing industry indicator, observed in April and forecast for the second quarter of this year was projected to decline further. France’s is expected to dip to 72, a historical low, from 76, along with 12 other Euro area member states and a total 17 states out of the EU 27. As a result, the Euro area’s is projected to drop to 70 from 74.7 and the EU 27 to 71 . Germany’s is also expected at a historical low to 71.8 (from 76.2) along with the UK’s to 72.8 (from 74.3) Spain’s to 69.8 from 63.5 and Italy’s to 66.2 (from 70.4). Romania’s capacity index remains the least impacted at 72 (compared with 73.9 in March). In a domino effect, the production capacity indicator for the same period swell due to the lack of industrial activities as 16 member states reached historical highs. France’s jumped to 43 (from 33) only three points from the record high 46 points during the recessionary year 1993. The Euro area’s grew to 47 (from 35) and the EU 27 to 46 (from 36).
MAY 2009
Economic Sentiment Indicator climbs anew modestly while Euro area’s production expectations jump
FRANCE’s Economic Sentiment Indicator climbed nearly two points, and for the second consecutive month to 76.1 from the previous month 74.6, above the Euro area’s 69.3 points where confidence nevertheless gained three points and the EU 27 a more subdued 66.7 points. France’s retail trade sales index, to -11 points (from -25) accounted for the overall index increase as stocks fell to -8 points (from 8). The Euro area’s retail index picked up as well, to –15 (from –20) and the EU 27 to -17 (from -21). Germany’s retail trade sales index bettered three points to -24, Spain’s gained seven points to -22, while the UK’s stagnated at -27. Italy posted the only positive figure, and the lowest at 2 from seven. However, sub indices fared inversely to the retail index. Germany’s regained confidence through its ESI proved more modest, one point to 74.1 unlike Italy’s up five points to 78.8, and the UK to 69.3 while Spain’s slid back to 71 points from the previous month 71.9 Denmark recovered from its dark mood as its ESI jumped 10.6 points to 78.5 points along with Sweden to 82.4 (from 77.7 points) while Finland‘s edged one point to 78.9. Slovenia’s confidence also recovered substantially, to 48.7 points (from 37.9) along with Hungary to 47.3 points (from 34.5) while inversely, Bulgaria, the Czech Republic and Cyprus ESI declined.
France’s Industrial Confidence Indicator stayed unchanged at -33 points, while the Euro area’s and the EU 27 picked up to -34 points (from –35 and –36). Italy and the UK observed the strongest gains, each four points, with indicators rising respectively to -26 points (from -31 and to -40 points (from -44). Three member states, among which Denmark, Hungary and Portugal, observed substantial improvements, on average 10 points, unlike Germany, where the index grew a modest point to -39 (from -40). Spain’s indicator performed similarly to -35 points (from -36).
Production expectations in France also stayed subdued , climbing to -21 (from -23) while the Euro area’s jumped four points to –21 and the EU 27 gained seven points to –20. Germany’s index climbed to -28 (from -33) Italy to -11 (from -20) Portugal to -18 (from -25) Finland to -16 (from -23) and by Slovenia to -9 (from -16). Other member states including the UK’s production expectations jumped to -26 (from -40) along with Denmark to -9 (from -24) followed by Sweden, to -8 (from -18) and Hungary to -34 (from -48). Order books deterioration in France reflected the overall index, down to -66 points from the previous month -61, similarly to the Euro area’s, and the EU 27 with the exception of Portugal and Slovenia. Stocks of finished products however lightened in France, to 13 (from 18) and in the Euro area. The EU 27 observed a similar trend despite the UK’s stagnating inventories along with Germany. Denmark, Portugal, Slovenia and Slovakia recorded best performance with stocks melting on average three to ten points.
Production trends in recent months remained mild: France’s roe to -42 points (from -44) similarly to the Euro area’s and the EU 27. Germany’s stayed flat at -40 points along with Spain’s at -45 while the UK’s worsened to -52 (from -48). Italy’s rose to -60 points (from -61). However, Denmark Sweden, Luxembourg, Lithuania the Netherlands, Slovenia, Slovakia and Sweden observed on average, a 10 point surge, unlike Finland where the index slid further. Export order books minimalist level accounted for some member states pessimism: France’s fell back to -72 points (from -71) only three points away from its historical low two months ago at -75 points. The Euro area, and the EU 27 reached their historical lows, respectively at –64 and –61 points impacted by Germany, Spain, and Italy, heavy weights, despite major progress in Denmark to -56 points (from -61) in Portugal to -65 (from -74) in Slovenia to -77 (from -84) while Slovakia, Sweden, Luxembourg, and Finland’s indices deteriorated. Denmark’s five point gain to -56 (from -61) among Nordic states posted the only exception.
Employment expectations thus rose in Denmark, to -36 (from -42) unlike Finland and Sweden, while France’s edges more modestly t -43 (from -45). The Euro area’s and the EU 27 also climbed a meager point as Germany’s and Spain’s remained flat. Italy’s and the UK’s gained two points, Luxembourg jumped ten points, along with Slovenia and Slovakia. Selling price expectations recorded another massive cut in France to -9 points (from -1) while the Euro area’s rose one point unlike the EU 27, flat. Spain recorded the most substantial price decline, to -15 points (from -10) along with the UK to -16 (from -20), the Netherlands to -7 (from -13) and Denmark to -9 (from -11).
JUNE 2009
Economic Sentiment Indicator picks up despite deteriorating order books as stocks start depleting
FRANCE’s Economic Sentiment Indicator rose and for the third consecutive month, over three points to 80.7 from the previous month, above the Euro area’s 73.3 points where confidence nevertheless performed similarly while the EU 27 recorded stronger assurance, up four points to 71.1. In Germany, confidence picked up as well, over three points to 77.6 while Spain and the UK observed milder changes with their respective ESI climbing two points each. Italy’s ESI rose one modest point to 80.2 Out of Nordic countries, Denmark’s and Sweden’s ESI climbed each three points while Finland’s remained more subdued and rose one point.
Stocks of finished products in France fell substantially, to 4 (from the previous month 11), and recorded their third consecutive drop, the strongest compared with the Euro area where stock levels decreased by only two points to 16, and in the EU 27 by one point to 19 points. In Germany stock levels dropped one point as well, to 27, the UK two points, (to 31 from 33) while Italy and Spain performed inversely with stocks increasing although very modestly respectively to 4 (from 3) and to 28 (from 27). Out of Nordic countries, Denmark posted best figures with stocks falling to -11 points from 6, followed by Sweden to 35 points (from 40) while in Finland, stock levels only fell one point to 17. Out of the EU 27, Slovakia’s stocks jumped to 19 points from the previous month 10 points. As a result of lower stock levels, France’s Industrial Confidence Indicator improved, although a mild two points to -30 from the previous month. The Euro area’s indicator climbed one point to -32, as well as the EU 27 to -33 points. Germany’s Industrial Confidence also climbed modestly, two points,
to -37, Spain’s gained one point to -34 while Italy’s and the UK’s stagnated. On average, all Euro area member states’ industrial confidence rose three points, climbing their respective ways out of historical lows reached in March when nine countries out of a total 16 had reached rock bottom assurance.
Production expectations fared similarly better, up five points in France to -15 despite posting negative figures since last August. In the Euro area, output prospects grew alike, to -16 points while the EU 27 gained two points to -17. Germany performed best , with expectations up seven points to -21. Italy’s expectations and the UK’s gained three points and Spain’s two points. Denmark’s and Sweden’s production expectations remained upwards, respectively up five points and three points, while Finland’s fell two points.
Production trends in recent months recorded a giant leap compared with the previous month: France’s jumped eight points to -33, the EU 27 gained six points to -36, and similarly in the Euro area. Spain recorded the strongest increase, 11 points to -34, followed by Germany up eight points to -32, and the UK’s five points gain to -47. By contrast, Italy’s production indicator stagnated at -60 points. Euro area member states overwhelmingly outperformed east European countries where production trends fell massively with the exception of Lithuania, up 20 points to -44 and Slovakia up 21 points to -47 points, while in Poland, eastern Europe’s biggest economy, production trends proved mild, up three modest points to -19. Despite encouraging signs, Export order books worsened and reached a historical low in France, at -76, similarly in the Euro area at -65 points, in the EU 27 at -62 points and including Germany at -64 points. Spain’s export order books by contrast climbed one point to -59, Italy’s increased two points to -68, but the UK’s deteriorated, down three points to -50, and despite a very competitive foreign exchange rate against major currencies. Out of the EU 27, Cyprus perform best with export order books up 10 points to -65. East European member states strongest figures were posted by Hungary, with export order books increasing three points to -64 while Poland’s stagnated at -67 points.
Employment expectations remained grim in France, down one point to -44, as prolonged periods of days not worked, set up to save guard jobs in the manufacturing industry remained on the agenda. The Euro area’s expectations by contrast grew two points to -36 and similarly in the EU 27 to -34 points, despite international organizations’ dire labor market forecasts. Germany’s expectations also increased, four points to -34, along with Spain’s, five points to -30, Italy’s by two points to -22 and the UK’s by one point to -41. Malta’s optimism sent expectations up 12 points along with Austria, a five-point increase, similarly to Sweden, while Denmark’s expectations stagnated and Finland’s worsened. Out of east European member states, Lithuania showed pessimism with the indicator down 10 points to -63 points.
With regained although modest confidence, Selling price expectations stabilized in France, and for the second consecutive month, while they edged on average one point lower in the EU 27 and in the Euro area. Prices in the UK jumped seven points while Sweden slashed prices by more than half compared with Denmark‘s milder two points cut along with Finland. In eastern Europe, price expectations in Slovakia jumped six points, while Lithuania’s fell by 14 points, the strongest price cut. The global economic downturn kept impacting industries however : Capacity utilizations in the manufacturing industry reached a historical low in the second quarter, as a direct result of grim export order books, and slower consumer consumption. France’s capacity fell to 72% (compared with 76% in the first quarter) , the Euro area’s dipped to 70.5% (from 74.7%) and the EU 27 to 71% (from 74.7%). Germany’s capacity utilization fell to 71.8%, Italy’s to 66.2%, Spain’s to 69.8% and the UK’s to 66.2%. Out of the EU 27, a total 17 member states recorded a similar trend with the exception of Poland and Romania. Lithuania’s reached rock bottom level at 65.2%.
Production capacities in the manufacturing industry, and on the same period, also posted worst performances as member states reached record high levels resulting from plants temporary shut down, and reduced working hour weeks. France’s capacity jumped to 43% only three points away from the 1993 recessionary period (33% the previous quarter). The Euro area along with the EU 27 average 10% increase as well, a record high at 47% and 46%respectively. A total 16 member states observed the same over-capacity levels and including Nordic countries with the exception of Finland. The Estimated number of months production assured by orders on hand in the manufacturing industry improved: France’s rose to 3.3 months (compared with 3.1 months). The Euro area’s by contrast shrank to 2.8 months (from 3 months) and the EU 27 to 3 months (from 3.5 months). Germany reached a historical low at 2.3 months ( from 2.4 months) along with the Czech Republic at 6.2 months, followed by Latvia at 3 months and Estonia at 3.2 months. Italy’s number of months production stayed unchanged at 3 months unlike Spain’s, down to 2.9 months from 3.5 months and the UK, to 2.5 months from 2.7 months.
Export volume expectations in the second quarter improved in France, to -43 points from the previous quarter -49 a historical low, along with the EU 27 at -26 points, and the Euro area at -27 points. Italy’s and Spain’s remained flat while the UK’s also bettered. Out of the EU 27, five east European member states posted stronger figures, while Slovakia stayed very pessimistic and Romania stable. Capacity utilizations by branch under-performed as nearly all sectors, with the exception of the food and beverage industrial sector, wood and wood products, observed record lows. Export volume expectations by branch stayed more upbeat as heavy players including motor vehicles-trailers-semi-trailers, metals products, and intermediate goods, textile, wood and wood products, and basic metals, shook off historical lows from the previous quarter and edged, although modestly, on average two points, towards higher volumes.
