German industrial orders gain 2.4 percent in February

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German industrial orders gained 2.4 percent in February, according to economy ministry provisional data released Wednesday, with domestic demand underscoring the positive trend in Europe's biggest economy.

A ministry statement also revised the level of January order growth up to 3.1 percent from an initial estimate of 2.9 percent, another sign of German strength that has benefitted from global economic activity.

The latest increase was well above a forecast monthly rise of 0.5 percent compiled by Dow Jones Newswires.

"The strongest momentum at the moment is from the domestic market," the statement said.

Orders from within Germany climbed 2.6 percent in February, while foreign orders were 2.3 percent higher, an encouraging sign that domestic demand is contributing to overall growth.

Orders from across the 17-nation eurozone rose by 3.2 percent meanwhile, with the third consecutive rise suggesting broadly favourable conditions among Germany's neighbours as well.

Germany has traditionally relied on exports to power its industrial machine.

A breakdown of the figures showed domestic demand was driven in particular by companies, while household consumption was also positive, but less dynamic.

German orders for investment goods, used to make final products, gained 4.6 percent on the month, while those for consumer goods were 2.1 percent higher.

Last week, the national statistics office said German retail sales had fallen by 0.3 percent in February from the previous month, as a long hoped for consumer rebound failed to materialize.

But ING senior economist Carsten Brzeski noted that the annual industrial fair this week in Hannover, northern Germany, was the source of upbeat comments from German bosses.

"It looks as if the entire sector is having a blast," Brzeski commented.

"Today's numbers show that this optimism is clearly not baseless," he added.

© 2011 AFP

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