CAPTION: Incoming orders in German industrial sector fall sharply. (picture alliance/dpa/Stefan Sauer)
Incoming orders to German industrial companies fell sharply in October. Compared to the previous month, 3.7 percent fewer orders were received, according to the Federal Statistical Office in Wiesbaden. By contrast, analysts had expected a slight increase of 0.2 percent on average.
The downward trend was particularly due to a lack of large orders. If this component is excluded, orders would have increased by 0.7 percent. In addition, the increase in total incoming orders in the previous month would subsequently be revised upwards from 0.2 percent to 0.7 percent. In a three-month comparison, which is less susceptible to fluctuations, orders fell by 4.6 percent.
Incoming orders continued their downward trend, commented the Federal Ministry of Economics in Berlin. Excluding the development of large orders, the order volume has been stagnating since spring, the ministry said. A sustained recovery in the industrial sector is therefore not expected until next year.
In detail, fewer orders for intermediate and capital goods such as machinery were received in October. In contrast, more consumer goods were ordered than in the previous month. While domestic demand rose by 2.4 percent, orders from abroad fell by 7.6 percent.
Bank economists emphasized the negative impact of the lack of large orders. These had strengthened the result in the previous month. "So far, many companies have compensated for the lower order intake by working off their order backlogs," said Commerzbank economist Ralph Solveen. "In the long term, however, they will not be able to avoid reducing their production, which suggests that the German economy will continue to shrink in the winter half-year."
The German economy contracted slightly in the summer quarter from July to September. If a further decline follows in the final quarter, then it is likely that Germany would be in a technical recession - in other words, it would see a decline in economic output for two consecutive quarters.
Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.
A single purchase
