European Industrial Orders Plunge 34%, Most on Record (Update1)
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By Jurjen van de Pol
March 27 (Bloomberg) -- European industrial orders dropped the most on record in January as the global recession forced manufacturers to cut production, reducing demand for equipment and machinery.
Industrial orders in the euro area fell 34 percent from the year-earlier month, the European Union statistics office in Luxembourg said today. The January drop was the biggest since the data series started in 1996 and exceeded the 28 percent decline economists forecast in a Bloomberg News survey. From the prior month, January orders fell 3.4 percent.
Demand for factory equipment is declining as the credit crunch and economic slump prompt companies worldwide to shut plants and put off investments. The European Central Bank on March 5 lowered its key interest rate by a half percentage point to a record low of 1.5 percent and signaled a further cut may be needed to spur lending and boost the economy.
“Indications for manufacturing activity across the euro zone have been dreadful,” said Howard Archer, chief U.K. and European economist at IHS Global Insight in London. Companies “are being hammered both by a collapse in domestic and global demand.”
Industrial production plunged 17 percent in January, the most since the data series began in 1986, and the jobless rate increased to the highest in more than two years. Europe’s manufacturing industry contracted for a 10th straight month in March and job cuts accelerated, data showed this week.
5,000 Workers
Germany’s Heidelberger Druckmaschinen AG, the world’s largest maker of printing presses, said yesterday that it plans to fire 5,000 workers, about a quarter of the workforce, as it lowers costs to counter slumping orders. Heidelberger’s orders in the three months through December fell 42 percent.
Continental AG, Europe’s second-biggest auto-parts manufacturer, said on March 11 it plans to eliminate at least 1,900 jobs over the next 12 months and reduce tire-making in the region because of falling vehicle sales.
The global slump in auto demand poses an “existential threat” to carmakers and component suppliers, Daimler AG Chief Executive Officer Dieter Zetsche said on March 25. Daimler, the world’s second-largest maker of luxury cars, will reduce hours for 68,000 German workers beginning next month to cope with what Zetsche called a “Darwin year” of survival for the industry. |
