German industry suffers drop in orders in May: official data

7th July 2010, Comments 0 comments

Orders placed with German industry, a pivotal exporting force in the eurozone, fell unexpectedly in May by 0.5 percent, official data showed on Wednesday.

The fall from the level the previous month,, reported by the economy ministry, spotlights the risk of a "double dip" recession in the 16-nation eurozone amidst tough austerity drives by governments to correct public finances.

Analysts polled by Dow Jones Newswires had forecast an increase of 0.5 percent in May following what was initially said to be a rise of 2.8 percent in April.

The economy ministry revised the April figure higher on Wednesday however, to an increase of 3.2 percent from March.

Economists are watching European economic data closely amid signs that the continent's recovery might be near the top of its cycle.

In June, a key leading indicator of eurozone growth, the purchasing managers' index (PMI) compiled by data and research group Markit, slowed for the second month in a row amid weaker exports, waning domestic demand and a slowdown in orders.

The eurozone economy grew by a slight 0.2 percent in the first quarter of 2010, official European Union data showed Wednesday as tough spending cuts began to bite across the crisis-hit bloc.

Growth across the wider 27-nation EU, which includes Britain and Poland, was also 0.2 percent between January and March compared to the previous quarter, according to the Eurostat statistics agency.

© 2010 AFP

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