Europe: austerity bites (in the Eurozone)

from Merijn Knibbe

Tomorrow (14 February) Eurostat publishes new data on EU industrial production in December 2011. Data for many countries are however already available. Despite an improvement of the bilateral trade balance of Germany with China of about 8 billion in the first ten months of 2011 (gross exports increased about 25%), even German production is down (graph). Euro countries are shown in Green, non-euro countries in red-brown. Any pattern? And why is the UK an outlier? ECB data on mortgages by the way spell bad times for construction, too.

 

For some countries data on GDP for the fourth quarter of 2012 are already available. Compared with the previous quarter GDP is down in Spain, the UK, Estonia and Lithuania and up in Latvia. As these data are seasonally adjusted and as economic growth/shrinkage has been extremely volatile in the Baltic countries, the parameters used to adjust the raw data for seasonal effects for these countries are probably quite ‘noisy’.

As it does not seem to be far fetched to assumed that production in Greece and Portugal and the Netherlands (also considering consumer expenditure in the Netherlands) and Ireland and Italy is shrinking, too, it seems save to state that a new recession has already started.