German Factory Orders Fall Most Since 2009
German factory orders declined at the fastest pace since January 2009, largely driven by a fall in capital goods demand, data from Destatis showed Monday.
Factory orders fell 5.7 percent month-over-month in August following the 4.9 percent rise in July. This was more than the 2.5 percent drop expected by economists and the biggest since January 2009, when orders were down 7.7 percent.
Domestic orders slid 2 percent and foreign orders plunged 8.4 percent in August. As regards the direction of foreign trade transactions, demand from Eurozone slid 5.7 percent and that from other countries slumped 9.9 percent.
Orders for intermediate goods declined 3 percent and those for capital goods fell 8.5 percent. Partially offsetting these decreases, consumer goods orders increased 3.7 percent.
Industrial production in Germany is forecast to fall 1.3 percent month-on-month in August reversing the 1.9 percent rise in July. The data is due on October 7.
Last month, Bundesbank said robust growth in July industrial production was influenced by the timing of school holidays. The bank cautioned that a counter movement to July data is to be expected in August.
In its interim economic assessment published on September 15, the Organization for Economic Cooperation and Development projected that the German would grow by 1.5 percent in both 2014 and 2015.
The German economy will probably not really gain momentum in the second half of this year either and is even likely to stagnate in the third quarter, Ralph Solveen, an economist at Commerzbank, said.
Last month, the OECD recommended more monetary support to boost demand as slow growth in the euro area was the most worrying feature of the projections.
The European Central Bank kept its key rates unchanged at a record low early this month as economic momentum in the euro area remains subdued. ECB President Mario Draghi unveiled details of its Asset Backed Securities and covered bond buying programs.
by RTT Staff Writer
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