German Factory Order Growth Exceeds Expectations
June 06 2019 - 3:45AM
RTTF2
Germany's factory orders grew more-than-expected in April,
driven by demand from non-euro area economies despite heightened
trade tensions.
Data published by Destatis showed that factory orders grew 0.3
percent month-on-month in April, weaker than the revised 0.8
percent increase seen in March, but better than the expected 0.2
percent.
Domestic orders declined 0.8 percent, while foreign orders
advanced 1.1 percent. New orders from the euro area decreased 5.8
percent. By contrast, demand from other countries was up 5.7
percent.
On a yearly basis, new orders in manufacturing fell at a slower
pace of 5.3 percent in April following a 5.9 percent decline in
March. Economists had forecast a 5.9 percent drop.
Further, data showed that manufacturing turnover decreased 0.6
percent on month in April, in contrast to an increase of 0.1
percent in March.
The economy ministry said industrial activity is set to remain
subdued in the second quarter.
While today's industrial order data is definitely good news and
gives reason for moderate optimism, it will still take a while
before industry returns as a powerful growth engine for the entire
German economy, Carsten Brzeski, an ING economist said.
Industrial production data is due on June 7. Output is forecast
to contract 0.5 percent on month in April, offsetting March's 0.5
percent increase.
Data from VDMA showed that orders received in the mechanical
engineering plunged 11 percent in April from last year due to weak
domestic and foreign demand. This was the fifth consecutive decline
in engineering orders.
The latest Purchasing Managers' survey indicated only moderate
growth in GDP. The composite output index rose to 52.6 in May from
52.2 in April. The PMI survey indicated that the labor market
continued to lose momentum.
Official data showed that the unemployment rate climbed in May
for the first time since 2013.
The construction sector growth eased to a four-month low in May
as firms responded to a first fall in new orders since August, IHS
Markit data showed Thursday. The PMI fell to 51.4 in May from 53.0
in April.
The German economy managed to avoid a technical recession by
stagnating in the final three months of 2018. Following that, the
economy grew 0.4 percent in the first three months of 2019.
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