German industrial orders fall back in November

[FRANKFURT] German industrial orders fell in November, official data showed Friday, but analysts remained confident that Europe's largest economy would see a rebound in growth after a tough summer.

Orders fell by 2.5 per cent compared with October, correcting for seasonal and calendar effects, according to preliminary figures from the federal statistics office Destatis.

Industrial orders are a closely-watched indicator, with observers alert for clues to growth after the German economy slowed in the second and third quarters of 2016.

Domestic new contracts fell by 2.8 per cent, while foreign demand dropped by 2.3 per cent.

Orders from Germany's eurozone neighbours shrank more quickly than those from the rest of the world, at 2.7 per cent compared with two per cent.

All of the fall came from firms that produce manufacturing equipment, which reported a 4.8 per cent drop.

Intermediate and consumer goods both saw order books swell slightly, at 0.5 and 1.5 per cent.

November's new orders figure excluding volatile large contracts was only 0.6 per cent lower than the previous month - reaching the "second highest level ever despite the decline," Nordea bank economist Holger Sandte noted on Twitter.

Destatis also revised October's industrial orders figure to a five per cent increase, from a preliminary reading of 4.9.

That "very strong increase" in October meant that a fall back was unsurprising the following month, the economy ministry in Berlin commented in a statement.

The ministry said "the trend in orders is clearly headed upwards" given a 3.5 per cent increase in new business when comparing the October-November period and August-September.

November's results "point to a very favourable development in the final quarter" of 2016, the civil servants concluded.

IHS Markit economist Howard Archer tweeted that, despite the monthly fall in orders, "we still expect German GDP grew around 0.5 per cent quarter-on-quarter" in the final three months of 2016 - a marked increase over the 0.2 per cent achieved in the third quarter.

AFP