FRANKFURT—Export orders for Germany's important manufacturing
industry rose sharply in June in a trend that should bolster
industrial production in Europe's largest economy over the next few
months, despite a slowing Chinese economy and lingering concerns
about Greek debt.
Data from Germany's economics ministry showed Thursday that
manufacturing orders, adjusted for seasonal swings and inflation,
surged 2.0% in June from the previous month, bringing the volume of
total orders back to levels last seen in April 2008.
"The trend in orders is clearly pointing upwards," indicating an
ongoing, albeit modest, expansion in German industry, the ministry
said.
But economists warned that the data—beating forecasts of a 0.2%
monthly increase—were inflated by an unusually high volume of bulk
orders.
AIDA Cruises, a German cruise line which belongs to Carnival
Corporation, placed orders in June for two new ships with Meyer
Werft in Lower Saxony. Airbus Group SE, which builds single-aisle
planes in Germany, also reported strong aircraft orders during
June's Paris Air Show.
"Excluding such effects, demand was up a more moderate 0.3%,"
said Andreas Rees, UniCredit's chief German economist.
Strong foreign demand also bolstered manufacturers' order books
in June, the ministry said, with a weaker euro exchange rate making
eurozone goods more competitive overseas.
Orders from outside the eurozone surged 6.3% from May, while
eurozone orders rose 2.3%. Domestic orders meanwhile fell 2.0%, a
sign that external demand is increasingly driving economic activity
here.
"Looking ahead, we continue to believe the German economy is on
track to post above-potential GDP growth of 1.5% this year and
next; however, should external demand remain firm, risks
surrounding our forecast may be skewed to the upside," said
Barclays economist Fabio Fois.
Germany's VDMA engineering federation, which represents over
3,000 midsize businesses, said last week that the U.S. has
overtaken China as the biggest trading partner of German
engineering firms.
But most economists doubt that German industrial production
data, published Friday, will be as strong. Economists polled by The
Wall Street Journal last week forecast a 0.4% monthly increase in
industrial output in June.
-Hans Bentzien in Frankfurt contributed to this article.
Write to Nina Adam at nina.adam@wsj.com
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