German industrial orders 1.4 pct lower in August

AP News
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Posted: Oct 06, 2011 7:45 AM
German industrial orders 1.4 pct lower in August

Industrial orders in Germany were down a sharper-than-expected 1.4 percent on the month in August, a second consecutive drop that added to signs of slowing momentum in Europe's biggest economy.

The Economy Ministry said Thursday the decline was due to a drop in orders from inside Germany, which was exacerbated by the country's traditionally long summer vacation. It also said the number of large orders was below average.

Economists had expected orders to remain flat or decline by a smaller amount. The fall followed a 2.6 percent month-on-month decline in July _ a figure was revised from the original estimate of a 2.8 percent drop.

Recent data have pointed to slowing momentum in Germany, with business confidence declining amid concerns about the impact of the eurozone debt crisis.

The economy grew by only a weak 0.1 percent in the second quarter. Third-quarter growth figures are due in mid-November.

UniCredit economist Alexander Koch noted that industrial orders figures were being influenced by high volatility in bulk orders, and that demand in the transport sector pushed up growth earlier in the year. Declines in the third quarter "can be partly explained by a technical correction," he said.

However, he added that "industrial demand will decelerate strongly toward the end of this year."

The DIW economic think tank forecast Thursday that Germany's economy will grow by only 1 percent in 2012 after expanding by 2.8 percent this year.

It had previously predicted growth of 1.8 percent in 2012 and 3.2 percent this year.