German Factory Orders Fall Less Than Expected In October

(RTTNews) - Manufacturing new orders in Germany declined at a slower than expected pace in October amid a slump in domestic demand, while the gain for September was revised up significantly due to a big order in the shipbuilding industry, preliminary data from the statistical office Destatis showed Thursday.

Orders shrunk a seasonally and calendar-adjusted 1.5 percent from the previous month, which was less severe a fall than the 2.0 percent slump economists had forecast.

Excluding bookings for big-ticket items, factory order edged up 0.1 percent in October.

The September gain in new orders was revised up to 7.2 percent from the originally reported 4.2 percent.

Destatis attributed the relatively high revision in September to a large-scale order in the manufacture of ships which was reported late.

Large-scale orders in the manufacture of ships also strongly impacted the overall result for October, the statistical office said.

Core orders that exclude large orders continue to move sideways at a low level suggesting that there are still no signs of an upturn in the manufacturing sector, Commerzbank economist Ralph Solveen said.

"After all, a large majority of companies in the Ifo survey rate their order backlogs as too low, and the sentiment indicators give no indication that companies expect a rapid improvement here," Solveen noted.

"So there is hardly any reason for them to ramp up production quickly. This speaks against an imminent recovery of the German economy, which is likely to stagnate at best in the winter half-year."

Domestic orders shrunk 5.3 percent in October. Foreign orders rose 0.8 percent as a 7.6 percent slump in demand from the euro area was partly offset by a 6.3 percent increase in orders from outside the single currency bloc.

Among the different industrial sectors, the manufacture of machinery and equipment logged a 7.6 percent decline in orders and automotive industry registered a 3.7 percent fall in demand, Destatis data showed.

Demand grew 10.2 percent for basic metals and 8.0 percent for computer, electronic and optical products. Intermediate goods orders grew 0.9 percent and demand for consumer goods rose 4.2 percent. Meanwhile, capital goods production logged a 3.6 percent fall in orders.