October 1, 2012
In September, the ifo-index dived again, falling to 101.4 (after 102.3). Business expectations in manufacturing came in weaker as well. The balance of positive and negative opinions firmly sits in negative territory (-19.6 after -17.7 in Aug.).
Recently, signs of weakness in manufacturing have mounted. Order intake is below last year's level at present. Orders from other eurozone countries, in particular, have declined markedly in the first seven months 2012 (-12.2% yoy), while orders from outside Europe have reached a plateau (still 1.6% above the pre-year level). Risks to manufacturing activity stem from a continuing economic downturn in major export markets, e.g. China and the US, for which we have recently downgraded our GDP forecast. All in all, industrial production looks set to more or less stagnate in real terms in 2012 and only recover gradually in the course of 2013.
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