German Factory Orders Decline More Than Forecast On Foreign Demand
Germany’s factory orders declined notably in May as trade disputes weighed on foreign demand, figures from Destatis showed Friday.
Factory orders decreased 2.2 percent month-on-month in May, in contrast to a 0.4 percent rise in April. This was the first fall in three months. Economists had forecast a marginal fall of 0.1 percent.
Domestic orders grew 0.7 percent, while foreign orders fell 4.3 percent. Orders from the euro area slid 1.7 percent and that from the non-euro area countries decreased 5.7 percent.
Orders for intermediate goods decreased 1.5 percent and that for capital goods fell 2.8 percent. For consumer goods, a moderate drop of 0.7 percent was registered.
On a yearly basis, overall factory orders plunged 8.6 percent annually, the sharpest fall since 2009. Orders were forecast to decline 6.3 percent after decreasing 5.3 percent in April.
Data showed that manufacturing turnover fell 1.2 percent on month in May, following a 0.6 percent drop in April.
The industrial economy will continue to be weak in the months ahead, the economy ministry said.
“The German economy is not only likely to have shrunk slightly in the second quarter – as we have been expecting for some time – but the outlook for the third quarter is also becoming increasingly gloomy,” Ralph Solveen, deputy head of economic research at Commerzbank, said.
Bundesbank last month said the largest euro area economy is set to contract slightly in the second quarter as temporary factors that boosted first quarter growth faded.
According to the Purchasing Managers’ survey, Germany’s manufacturing remained the weakest-performer in the currency bloc. The sector contracted for the sixth month in a row as a slowdown in the auto industry weighed on order books.
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