Germany's factory orders decreased unexpectedly in April on weak demand from non euro area economies.
Factory orders declined 2 percent in April from March, when they grew by revised 2.6 percent, figures from Destatis revealed Monday. Economists had forecast a 0.3 percent rise for April.
A similar sharp decrease was last seen in July 2015. The monthly growth for March was revised up from 1.9 percent.
Domestic orders grew 1.3 percent, while foreign orders fell 4.3 percent on the previous month.
Within foreign demand, new orders from the euro area advanced 2.5 percent on the previous month, while new orders from other countries slid 8.3 percent.
Orders for intermediate goods moved up 4.8 percent, while the manufacturers of capital goods showed a monthly fall of 6.1 percent. For consumer goods, a decrease in new orders of 1 percent was registered.
ING Bank economist Carsten Brzeski expects the German industrial outlook to remain mixed. Companies are still reducing their inventories to satisfy new orders, he pointed out.
At the same time, however, a slight increase in capacity utilization and backlogs of work should provide enough support for the industry not to fall off a cliff, Brzeski noted.
In sum, industrial muddling through in Germany looks set to continue, the economist said.
Germany's industrial production data for April is due on June 7. Production is forecast to expand 0.7 percent in April following a 1.3 percent fall in March.
Bundesbank last week lowered its growth projections due to sluggish exports. The largest euro area economy is forecast to grow 1.7 percent this year and 1.4 percent next year.
by RTT Staff Writer
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