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Weak export demand hits orders out of German factory gates
[BERLIN] Weakness in China and Germany's other export partners have prompted the biggest drop in industrial orders in Europe's top economy in more than a decade, official data showed Monday.
German industrial orders, a key measure of demand for goods, dropped sharply in April as foreign demand slumped, according to data released by statistics office Destatis.
The drop of two percent in comparison with March was far worse than the 0.7-per cent decline forecasted by analysts polled by financial services provider Factset.
German industrial orders had not shown such a deep slump since July 2005, Destatis said.
"The weakness seen in the beginning of the second trimester stems mainly from strongly fluctuating orders from manufacturers of investment goods outside the eurozone," said the economy ministry in a separate statement.
Such orders fell 13.3 per cent in April compared to March, when they had risen 11.0 per cent, the ministry said.
Overall, domestic orders rose 1.3 per cent in April while foreign demand fell 4.3 per cent, dragged down by poor uptake from outside the eurozone. Within the bloc, orders were up 2.5 per cent.
Meanwhile, Destatis also revised its March industrial orders figures upwards to 2.6 per cent from the previously announced 1.9 per cent.
Carsten Brzeski, chief economist at ING Bank, said the decline illustrated "weakness in China and other global export partners".
"Some might even see a Brexit element in this decline," he said, adding that "looking ahead, there is little reason to see a quick brightening of the outlook for German industry."