Toll Index July 2014 – an 8 year record month

Despite the gloom and doom German economic journalism preferred to see of late the German economy appears to be resilient and strong at least if you believe that heavy transportation proxies industrial production well. The Toll Index in July 2014 just out by the IDSC of IZA shows that transportation in July dropped (as seasonally expected) month on month on a per working day basis but year on year per working day this is the best heavy transport July in the last 8 years. There may be  quite a bit of uncertainty and insecurity in the air but none of this impresses transportation activity all that much. So we feel confident going out on a limb to say that the real industrial production number for July (to be published by the BMWi in mid September) will have to reflect the positive Toll Index picture somehow (it ought to be highly unlikely that all these heavy trucks drive around empty), forcing professional forecasting departments in the banking sector and elsewhere to postcast July in order to explain why they did not see it coming…

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