Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Tags: German | Factory | Orders

German Factory Orders Rise, Above Forecast

Monday, 07 May 2012 10:02 AM EDT

German factory orders rose more than economists forecast in March as demand from outside the euro area helped Europe’s largest economy weather the debt crisis.

Factory orders, adjusted for seasonal swings and inflation, jumped 2.2 percent from February, when they gained a revised 0.6 percent, the Economy Ministry in Berlin said today. Economists surveyed by Bloomberg News predicted a 0.5 percent increase, according to the median of 37 estimates. From a year ago, orders dropped 1.3 percent when adjusted for work days.

German companies are tapping faster-growing emerging markets as the sovereign debt crisis curbs demand in the euro region. Business confidence climbed to a nine-month high last month and investor sentiment unexpectedly rose to a two-year high. Still, economic growth will slow to 0.6 percent this year from 3 percent in 2011, according to the Bundesbank, as fellow euro-area members drop back into recessions.

Today’s data are “a very positive surprise,” said Klaus Baader, senior economist at Societe Generale SA in Hong Kong. “The numbers show that despite the crisis in the euro area, Germany is growing and benefiting from a revival in international trade.”

The euro rose to $1.3039 after the report from as low as $1.2956 earlier today. It fell after Francois Hollande yesterday won the French presidency and Greek voters stripped the ruling coalition of its majority, igniting concern that the region is losing its appetite for austerity.

Export Orders

European stocks declined, with the Stoxx Europe 600 Index retreating 0.2 percent at 12:30 p.m. in Frankfurt. The index is up 3.4 percent this year. By comparison, Germany’s benchmark DAX index has gained more than 10 percent.

First-quarter profits at German carmakers Bayerische Motoren Werke AG, Volkswagen AG and Daimler AG all beat analyst estimates. VW’s Audi unit will create 2,000 new jobs in Germany to keep up with demand.

Schuler AG, a German maker of metal-forming machines, last week raised its full-year forecast on higher investment spending in Asia and Europe. “The order situation is very good,” Chief Executive Officer Stefan Klebert said on May 2.

Today’s report showed domestic factory orders rose 1.3 percent in March while export orders climbed 3 percent, driven solely by a 4.8 percent increase in sales outside the euro area. Orders from within the currency bloc were unchanged from February, when they fell 3.3 percent.

Investment Goods

Orders for investment goods rose 4.2 percent and those for consumer goods jumped 5 percent. Basic goods orders slipped 1.1 percent. The Economy Ministry said overall orders fell 0.7 percent in the first quarter from the fourth quarter of 2011. February orders were revised up from a 0.3 percent gain and the volume of big-ticket items in March was average, it said.

“After the expected weakness in winter, the trend is gradually turning positive again,” the ministry said in a statement. “Industrial production should also benefit.”

Still, governments and households across Europe are reducing spending in response to the debt crisis, which has already driven Spain and the Netherlands back into recessions.

Spanish industrial production declined the most in more than two years in March. Output at factories, refineries and mines adjusted for the number of working days fell 7.5 percent from a year earlier, the most since October 2009, the National Statistics Institute in Madrid said today.

U.S. Consumers

In the U.S., Federal Reserve figures may show consumer borrowing rose by $9.65 billion in March, according to the median estimate of 28 economists.

In Australia, retail sales jumped 1.8 percent in the first quarter from the final three months of last year, the Bureau of Statistics said in Sydney today.

Puma SE, Europe’s second-largest sporting-goods maker, on April 25 reported first-quarter profit that trailed analysts’ estimates and said it faces challenges as European consumers cut back. German unemployment unexpectedly increased in April.

“The German economy is in relatively good condition,” said Jens-Oliver Niklasch, an economist at Landesbank Baden Wuerttemberg in Stuttgart.

“But we have perhaps reached a turning point and the economic outlook could worsen.”

© Copyright 2023 Bloomberg News. All rights reserved.

Monday, 07 May 2012 10:02 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved