German factory orders rise on hopes of milder recession

FACTORY orders in Germany rose in October, a sign of hope for manufacturers struggling with inflation and elevated energy costs.

Demand increased 0.8 per cent from September, beating the median 0.1 per cent estimate in a Bloomberg survey. The Federal Statistical Office said the gain was due to large-scale orders, without which there would have been a 1.2 per cent decrease. 

Fears of a deep winter slump were tempered in part by warm autumn weather, which allowed Germany to fill gas-storage facilities and lower the risk of disruptive shortages. A gauge of business expectations by the Ifo Institute rose last month, on optimism that the recession could be less severe than initially expected. 

A survey of purchasing managers by S&P Global also showed that conditions did not deteriorate in November, though the data continued to point to a slowdown in manufacturing activity. Longstanding pressure on supply chains started to ease, helping cool some price pressures. 

German inflation, meanwhile, slowed to 11.3 per cent in November. This fed optimism that the surge in consumer prices may be peaking. Underlying inflation, which excludes volatile factors such as energy, was still expected to remain elevated. BLOOMBERG