OOPS!! - German April Mfg Orders Drop On Low Foreign Demand
By Andrea Thomas
Of DOW JONES NEWSWIRES
BERLIN (Dow Jones)--German manufacturing orders unexpectedly fell 1.8% in April on the month due to weaker demand from abroad, which hints at a slowdown in the euro-zone economy, data released by the German Economics Ministry showed Thursday.
The fifth consecutive monthly decline, which defied economists' expectations of a 0.5% increase in seasonally adjusted terms, comes as demand for German goods from euro-zone countries in particular plummeted. Demand from outside the 15-member strong euro-zone also fell, although to a lesser degree, as the euro set a record high of over $1.60 in April.
"The decline of orders is the sole result of weaker foreign demand, which declined by 3.8%," the ministry said in a statement.
"Order activity in the manufacturing sectors has weakened clearly over the past months," it said. "Domestic demand was more robust than foreign demand, but it's trend also points downwards. A weaker trend has to be expected for industrial production for the time being."
Relatively robust domestic demand rose 0.3% on month in April after the Purchasing Managers Index for Germany's manufacturing sector held steady at 53.6 in May.
But demand from the other 14 countries sharing the euro tumbled 5.6% in April from March, in seasonally adjusted terms, while demand from countries outside of the euro zone fell 2.3%.
The surprise monthly drop in orders comes as economists have said high oil prices, a slowing of the global economy and the strong euro are set to weigh on orders in the coming months.
March's figure was revised slightly higher to a 0.5% fall from the 0.6% drop reported previously.
Orders rose an annual 15.0% on an unadjusted basis in April, which compares with an upwardly revised 4.9% drop in March from the 5.0% decline reported previously.
Unadjusted, on the year, domestic orders rose 15.8%, while foreign orders climbed 14.3%.
According to the ministry, orders for producer goods fell 3.3% on the month, while capital goods orders fell 1.3%. Consumer goods orders bucked the trend, rising 1.2% on the month.
A two-month comparison, which irons out some volatility, showed that German manufacturing orders in March-April decreased 1.7%, compared with the previous two-month period, with demand from abroad down 2.7% mainly due to a 6.2% decline from orders from the euro zone, while demand from non-euro-zone countries were up 0.1%.
Demand for capital goods rose 0.8% during the March-April period, while orders for investment goods fell 3.3% and those for consumer and durable goods were down 2.9% in this measure.
The weak data signal weaker German industrial output for the months ahead. April data are scheduled to be released at 1000 GMT Friday.
Web site: www.bmwi.de
-By Andrea Thomas, Dow Jones Newswires; +49 30 2888 410; andrea.thomas@dowjones.com |
