German factory orders unexpectedly jump at start of year

GERMAN factories began the year on an upbeat note, with surprise increase in January orders.

Demand rose 1 per cent from the previous month, compared with a 0.7 per cent decline predicted in a Bloomberg survey. The jump was due to capital goods, particularly aircraft and spacecraft construction and motor vehicle engines, the statistics office said on Tuesday (Mar 7).

German output shrank 0.4 per cent in the final quarter of last year, making a recession on the back of higher energy bills difficult to avoid. Quickly rising borrowing costs that have yet to fully filter through are adding to economic headwinds.

Still, the manufacturing sector in Europe’s biggest economy has some grounds for optimism, underscored by a significant improvement in the expectations of Ifo institute’s survey for February. China’s reopening is likely to bolster such sentiment, raising the prospect of a boon for German exports. BLOOMBERG