Germany Factory Orders Decline More Than Expected
Germany’s factory orders declined more-than-expected in October on weak foreign demand, data released by Destatis showed on Monday.
Factory orders decreased 6.9 percent month-on-month in October, reversing a 1.8 percent rise in September. Economists had forecast a moderate fall of 0.5 percent.
Nonetheless, excluding major orders, factory orders dropped only 1.8 percent from the previous month.
Domestic orders went up 3.4 percent, while foreign orders declined 13.1 percent in October. New orders from the euro area fell 3.2 percent. The fall in new orders from other countries amounted to 18.1 percent in October.
Demand for intermediate goods was down 2.7 percent and that of capital goods declined sharply by 10.7 percent. For consumer goods, orders went up by 4.3 percent.
The economy ministry said the second sharp decline in incoming orders within the last three months has put a further damper on the economic outlook.
It is becoming increasingly apparent that the order boom in manufacturing has come to an end, at least for the time being, Ralph Solveen, an economist at Commerzbank, said.
The economist said the increase in industrial production that is possible emerging for the fourth quarter is unlikely to be sufficient to offset the pandemic-related slump in sales in some service sectors, with the result that real GDP is likely to shrink by the end of the year.
On a yearly basis, factory orders slid 1 percent, in contrast to the 10.3 percent rise a month ago.
Further, data showed that manufacturing turnover grew 3.6 percent on month, following a revised 0.1 percent drop in September. Compared with October 2020, turnover was 2.6 percent lower.
Source: Read Full Article