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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (244938)	6/11/2003 9:34:44 AM
From: Haim R. Branisteanu	Respond to of 436258

Great reason to buy EUR's - German April Industry Production Falls a Second Month (Update2) June 11 (Bloomberg) -- German industrial production declined for a second month in April, led by a drop in goods such as factory machinery, as Europe's largest economy teeters on the brink of a second recession in as many years. Production at factories, construction sites, utilities and mines, which accounts for about a quarter of the economy, fell 1 percent from March, the biggest decrease this year, the Economics Ministry said. Economists had expected a decline of 0.4 percent. Germany's $2.3-trillion economy shrank in the first quarter after barely growing since a recession in 2001. Companies such as Bayerische Motoren Werke AG, the world's second-largest maker of luxury cars, say the euro's 24 percent increase against the dollar in the past year will hurt earnings. German manufacturing contracted last month. ``I have written off a recovery in Germany for this year,'' said Ralf Bufe, chief executive officer of building materials maker Pfleiderer AG, which supplies companies including McDonald's Corp. and Ikea. ``The U.S. economy isn't strong enough to pull us out of the slump.'' U.S. Federal Reserve Bank of Philadelphia President Anthony Santomero said late yesterday in New York that the world's largest economy ``is not yet growing sufficiently.'' About a 10th of German exports go to the U.S. economy, which grew at an annual rate of 1.9 percent in the first quarter. Hurting Exports The Kiel-based IfW Institute for World Economics, one of Germany's six main economic research institutes, last week said it sees a recession in the first half as the rising euro makes the nation's exports more expensive. The euro traded at $1.1719 at 11:29 a.m. in Frankfurt. The decline in April production was led by a 2.8 percent drop in goods such as factory machinery and tools, the ministry's report showed. Consumer goods production gained 1.2 percent. This year ``is the third year in a row that Germany's economy has hardly grown more than 0 percent,'' Dieter Hundt, head of the BDA federation of employers, said in Berlin. ``We have a recession.'' There are indications the German economy may avoid another contraction in the second quarter. Factory orders unexpectedly rebounded in April as the end of fighting in Iraq prompted customers to place orders they had postponed before the war. Business confidence gained in May. ``There are some signs of an improvement in the economy later in the year, but for now the bottom is still ahead of us,'' said Richard Zellmann, who helps manage $10.6 billion as head of markets and strategy at Helaba Trust. Weighing on Europe Germany accounts for about a third of the economy in the dozen euro nations. The euro economy may stagnate through the third quarter, the European Union said on June 5, the day the European Central Bank last week lowered interest rates to the lowest in any euro country since at least 1948. ``The first half is likely to be very weak, and expectations for annual average gross domestic product growth for this year and 2004 have had to be scaled down,'' ECB President Wim Duisenberg said that day, explaining the rate cut. The reduction in borrowing costs, the third since December, took the bank's main refinancing rate to 2 percent from 2.5 percent. Interest-rate futures contracts show investors expect another rate cut by year-end. The yield on the three-month December Euribor was 1.81 percent at 11:54 a.m. Frankfurt time, compared with a 2.12 percent current three-month rate. For now, Duisenberg damped expectations that another rate cut will come soon. ``It is too early to again discuss further steps,'' Duisenberg said in a televised interview with Bloomberg News late yesterday. Last Updated: June 11, 2003 07:35 EDT