Germany's factory orders grew at a faster pace in June, exceeding expectations, as the rebound in domestic demand offset the decline in foreign demand.
Orders grew a more-than-expected 1 percent in June from May, when they increased by a revised 1.1 percent, data from Destatis showed Friday. They were forecast to grow moderately by 0.5 percent.
Domestic orders grew 5.1 percent, while foreign bookings declined 2 percent in June. Demand from the euro area eased 2.4 percent, and orders from other countries decreased 1.5 percent.
Excluding major orders, manufacturing bookings climbed 2 percent on month in June.
Manufacturers of intermediate goods reported a 3.7 percent increase in orders and consumer goods orders advanced 2.3 percent. Meanwhile, the manufacturers of capital goods showed decreases of 0.8 percent.
Year-on-year, order growth accelerated to 5.1 percent in June from 3.8 percent in May. Growth was forecast to improve to 4.4 percent.
Data showed that manufacturing turnover gained 0.3 percent month-on-month in June, slightly faster than the revised 0.1 percent rise seen in May.
High Ifo business confidence and the solid order figures suggest a good second half of the year for the German economy, even if it should feel a little headwind, based on the projection of a strong euro up to the end of the year, Commerzbank analyst Marco Wagner said.
"Orders indicate a further slight revival in the industrial economy," the German economy ministry said. The excellent business climate in the manufacturing sector supports this assumption, the ministry added.
Purchasing Managers' survey from IHS Markit showed continued sharp increase in Germany's construction activity.
The construction Purchasing Managers' Index rose to 55.8 in July from 55.1 in June. The score suggested the second fastest rate of growth since March 2016.
by RTT Staff Writer
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