(Photo: Opel)
BERLIN Orders for Germanys industrial goods dropped unexpectedly in May, led by a fall in demand from other countries in the euro area and at home, official data showed Friday.
Orders were down 1.3 per cent compared with the previous month, the Economy Ministry said. That contrasted with economists forecast of a 1.2 per cent increase.
Orders from elsewher in the group of 17 European unio countries that use the euro declined 3.9 per cent, while orders from inside Germany dropped 2 per cent. But demand from countries outside the eurozone rose 1.1 per cent.
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It was the second consecutive dro for the country, following a 2.2 per cent decline in April. The ministry pointed to fluctuations in the number of large orders, which it said were below average in May, as one source of volatility over recent months.
Without bulk orders, the general direction remains upward, if less clearly than before, it said in a statement.
Germany has Europes biggest economy and so far has weathered the continents debt crisis well helped by its traditional export strength and a robust job market that is fueling domestic demand.
Fridays numbers are disappointing but have to be taken with a pinch of salt, said Carsten Brzeski, an economist at ING in Brussels. May had an unusually high number of public holidays this year, which probably blurred the picture to some extent, he said.
Brzeski noted that the underlying trend of industrial orders in recent months has been slightly positive despite falling demand from other countries that use the euro. He said that, while fairly well-filled order books should ensure a gradual pick-up in production in the longer term, the medium-term outlook is not yet looking rosy.
On Thursday the VDMA group, which represents Germanys machinery producers, said it is now forecasting a 1 per cent dro in production this year compared with the 2 per cent increase it predicted last September.
It pointed to a disappointing start to the year, particularly in the German market, but noted that exports to the key Chinese and U.S. markets have started increasing again.
