German industrial orders plummet in December: ministry

February 08, 2011 | 08:00
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German industrial orders plummeted by 3.4 per cent in December from the previous month, data released on Monday by the economy ministry showed, partially erasing a jump of 5.2 per cent in November.
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Economists had expected a drop following a large number of big-ticket orders in November, but the general trend continued to improve, a ministry statement said.

Analysts polled by Dow Jones Newswires had forecast a seasonally-adjusted monthly decline of 1.5 per cent.

German domestic orders lost 2.4 per cent owing notably to lower demand for motor vehicles, while foreign orders were off by 4.2 per cent, the ministry figures showed.

Within the 17-nation eurozone however, industrial orders gained 3.7 per cent in December, rebounding from a drop of 1.6 per cent the previous month.

The economy ministry also released a two-month calculation designed to smooth out one-off events, and it showed a gain of 4.4 per cent in November and December compared with September-October.

On an annual basis, industrial orders gained 20.2 per cent according to the two-month measure, and the overall trend "remains clearly oriented upward and was more dynamic in the fourth quarter than the third quarter" of 2010, the ministry said.

A further breakdown of the numbers showed the biggest monthly drop was among orders from outside the eurozone, which fell by 8.9 per cent, with those of capital goods used to make final products plunging by 15.5 per cent.

The declines point to slowing global economic activity however, which in Europe is expected owing in part to wide-spread austerity measures aimed at reining in excessive public deficits and debt.

The German government expects 2011 growth of 2.3 per cent, down from 3.6 per cent last year that represents the strongest rate since Germany was reunified in late 1990.

But "with a pick-up in domestic investment and the strengthening of the US economy, German industry should get enough fuel to continue running smoothly," ING senior economist Carsten Brzeski said.

Economy ministry figures on industrial production in December are due on Tuesday.

AFP

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