German industrial orders gain 1.6 percent in month: ministry

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German industrial orders rose by 1.6 percent in October from the level in September, economy ministry data showed on Tuesday.

Germany has the biggest economy in Europe and is heading for record growth this year, a track supported by this latest data.

Analysts polled by Dow Jones Newswires had forecast a more modest seasonally-adjusted rise of 0.8 percent following a sharp drop of 4.0 percent in September.

A breakdown of the numbers showed that industrial orders from within Germany gained a solid 2.4 percent on the month while those from abroad were up by 0.8 percent.

The rebound bodes well for stronger industrial output in the fourth quarter of 2010, and should help Germany post its best full-year growth since the country was reunified in 1990.

A German central bank forecast last week saw economic activity expanding by 3.6 percent this year followed by growth of 2.0 percent in 2011.

The economy has bounced back from its worst post-war recession in 2008-09 owing to robust global demand for its automobiles and high-quality industrial goods, and is starting to get help on the domestic front as well.

Ultra-low eurozone interest rates encourage business investment and falling unemployment has begun to underpin household consumption, often the weakest link in the German economic chain.

The household savings rate has stabilized in Germany, Goldman Sachs economist Dirk Schumacher noted Tuesday, as consumers might also have finally begun to "feel that their balance sheets have now sufficiently improved."

© 2010 AFP

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