Fears grow over German recession
FRANKFURT, Germany – FEARS that the German industry is facing a difficult year-end and even a possible recession in some key sectors were fuelled by data showing a bigger-than-expected slump in factory orders yesterday.
The economy ministry said in a statement that industrial orders declined by 3.3 per cent in September from August after already falling by 0.8 per cent the previous month.
That is much steeper than expected. Analysts polled by Dow Jones had been pencilling in a much more modest decrease of 0.5 per cent.
The decline was largely due to falling export orders, particularly from the eurozone, where they plummeted 9.6 per cent, the ministry explained.
But domestic orders were also weak, contracting by 1.8 per cent.
The slump in demand was seen across all sectors, with orders for semi-finished goods down five per cent, orders for consumer goods down 1.7 per cent and capital goods orders declining by 2.4 per cent, the data showed.
Taking the third quarter as a whole, industrial orders fell by 2.3 per cent, the ministry calculated.
Newedge Strategy analyst Annalisa Piazza said the data painted a “dire picture for the German factory sector which — in the second half of the year — is unlikely to be spared from a technical recession”.