Surge in factory orders underscores upswing
4 November 2005, BERLIN - German industrial orders surged by a higher-than- forecast 2.8 per cent in September, the Ministry for Economics and Labour said Friday, adding to optimism that Europe's biggest economy is on track to a pickup in growth.
4 November 2005
BERLIN - German industrial orders surged by a higher-than- forecast 2.8 per cent in September, the Ministry for Economics and Labour said Friday, adding to optimism that Europe's biggest economy is on track to a pickup in growth.
The release of the order book data, regarded by economists to be a key economic indicator, coincided with a government statement saying Berlin was raising its projection for German tax revenues this year and in 2006.
Tax receipts are expected to total 447.9 billion euros (535.2 billion dollars) this year, the nation's Finance Ministry said.
This is 0.7 per cent, or 2.9 billion euros, more than the forecast made in May. Tax revenue in 2006 should come in at 457.4 billion euros or 900 million euros more than previous projections.
But despite increasing its forecast, the Finance Ministry warned that "the finances of all public sector budgets remain very difficult".
Germany's main political parties are currently attempting to cobble together a "grand coalition" with a push to knock the nation's state finances into shape and cut the deficit being a key part of its agenda for a new administration led by Chancellor-designate Angela Merkel.
Analysts say that an upswing in growth will help to ease the pressure on the deficit by reducing the number of unemployed in the country and boosting corporate profits.
The rise in factory orders was far higher than the 1.1 per cent that economists had predicted with foreign orders expanding by a solid 5.2 per cent in September and domestic orders growing at a more modest 0.4 per cent.
"The order book data signals that the dynamic development of industrial activity will continue in the coming months," the Economics Ministry said when releasing the figures.
Overall, German industry's order books grew at about eight per cent compared to the same month last year, with the ministry pointing to a batch of big orders as a key reason behind the September rise.
But underscoring the volatility of the order book data, the increase in September follows a 3.8 per cent fall in August.
Subject: German news