Weaker foreign demand drove a bigger-than-expected drop in German industrial orders in April, data showed on Monday, in a sign that an economic slowdown in emerging markets may have left its mark on Europe’s biggest economy at the start of the second quarter.
The data adds to evidence that Germany will have to keep relying on private consumption rather than trade to drive growth as subdued global demand curbs appetite for its exports.
Contracts for ‘Made in Germany’ goods were down 2.0 percent on the month, the Economy Ministry said, marking the biggest monthly fall in nine months. That compared with a Reuters consensus forecast for a drop of 0.5 percent.
While domestic demand rose 1.3 percent, foreign orders dropped 4.3 percent, with demand from non-euro zone countries plunging by 8.3 percent. However orders from euro zone countries rose 2.5 percent.
ING Chief Economist Carsten Brzeski said the drop reflected a weakness in China and other global export partners.
“There is little reason to see a quick brightening of the outlook for German industry. Instead, the outlook will remain mixed,” he said, adding he expected industry to keep “muddling through.”
The Economy Ministry said the weak data for April was a result of a high fluctuation in orders for capital goods from non-euro zone countries.
“In general, the trend for industrial orders continues to rise moderately,” the ministry said in a statement.
The data for March was revised up to a rise of 2.6 percent from a previously reported gain of 1.9 percent.
Source: Reuters
