Summary: EA car sales continued to fall in March, highlighting the weakness of domestic demand

What the chart shows: The chart shows registrations of new cars in the euro area as a whole and in the four largest countries. The series are three-month moving averages to smooth out monthly fluctuations and are set to an index with the 2008 average=100.

Why is the chart important: Cars and houses are the two biggest purchases households tend to make. Their fluctuations are therefore a good indicator of the ‘true’ state of household demand (ie, showing where households put their money, as opposed to what they say they feel). The importance of the latest numbers is primarily that it highlights the weakness of German car sales. These have fallen at a double-digit pace year on year since January 2012, ie for fifteen months. Bearing in mind that Germany is the strongest economy in the EA, this raises substantial concerns about EA growth in 2013.

Chart and comments provided by Stein Brothers (UK) www.steinbrothers.co.uk