German industrial orders plummet in December: ministry

7th February 2011, Comments 0 comments

German industrial orders plummeted by 3.4 percent in December from the previous month, data released on Monday by the economy ministry showed, partially erasing a jump of 5.2 percent in November.

Economists had expected a drop following a large number of big-ticket orders in November, but the general trend continued to improve, a ministry statement said.

Analysts polled by Dow Jones Newswires had forecast a seasonally-adjusted monthly decline of 1.5 percent.

German domestic orders lost 2.4 percent owing notably to lower demand for motor vehicles, while foreign orders were off by 4.2 percent, the ministry figures showed.

Within the 17-nation eurozone however, industrial orders gained 3.7 percent in December, rebounding from a drop of 1.6 percent the previous month.

The economy ministry also released a two-month calculation designed to smooth out one-off events, and it showed a gain of 4.4 percent in November and December compared with September-October.

On an annual basis, industrial orders gained 20.2 percent according to the two-month measure, and the overall trend "remains clearly oriented upward and was more dynamic in the fourth quarter than the third quarter" of 2010, the ministry said.

A further breakdown of the numbers showed the biggest monthly drop was among orders from outside the eurozone, which fell by 8.9 percent, with those of capital goods used to make final products plunging by 15.5 percent.

The declines point to slowing global economic activity however, which in Europe is expected owing in part to wide-spread austerity measures aimed at reining in excessive public deficits and debt.

The German government expects 2011 growth of 2.3 percent, down from 3.6 percent last year that represents the strongest rate since Germany was reunified in late 1990.

But "with a pick-up in domestic investment and the strengthening of the US economy, German industry should get enough fuel to continue running smoothly," ING senior economist Carsten Brzeski said.

Economy ministry figures on industrial production in December are due on Tuesday.

© 2011 AFP

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