German factory orders experience sharp decline in August
by Associated Press
The drop in orders, a leading indicator for Europe's biggest economy, followed month-on-month gains of 4.6% in June and 4.9% in July.
Factory orders in Germany plummeted 7.7 per cent in August compared with the previous month, led by much lower demand from countries outside the eurozone, official figures showed on Oct. 6.
The drop in orders, a leading indicator for Europe’s biggest economy, followed month-on-month gains of 4.6 per cent in June and 4.9 per cent in July.
The Economy Ministry said that orders from inside Germany were down 5.2 per cent, while those from non-eurozone countries were off 15.2 per cent. Orders from Germany’s partners in the 19-nation eurozone were up 1.6 per cent.
The ministry said the drop may be due in part to big bulk orders in July and to the fact that summer vacations at some automakers fell in August this year. There was a 12 per cent drop in orders in the car sector, while orders for machinery were off only 1 per cent.
“Today’s disappointment has also an upside: it brings some relief to German manufacturers who are increasingly suffering from high backlogs,” Carsten Brzeski, a Frankfurt-based economist at ING, said in a research note.
“Judging from still richly filled order books and low inventories, the future for industrial production should be extremely bright,” he added, “if it wasn’t for the ongoing supply chain frictions.”