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German industrial orders rebound strongly in June

August 7, 2013 at 1:01 am | News Desk

German industrial orders rebound strongly in June BERLIN: German industrial orders, a key measure of demand for goods at home and abroad, rose 3.8 percent in June from the level in May, the economy ministry said on Tuesday.

The increase, after two months of falling orders, spells a boost for the country’s key manufacturing sector as Europe’s biggest economy recovers from a decline late last year amid the eurozone crisis.

The seasonally-adjusted June rise was mainly due to some big-ticket orders, including at the Paris air show, said the ministry. Without major contracts, orders declined 0.7 percent.

Capital goods orders in June rose 6.8 percent while orders for consumer and semi-finished goods fell slightly, by 0.2 percent each.

Overall, domestic orders were up 3.3 percent and export orders rose 4.2 percent.

The revised figure for May was a monthly decline of 0.5 percent, less than the previously reported fall of 1.3 percent.

For the second quarter as a whole, German industrial orders rose 1.2 percent after a smaller first-quarter rise of 0.5 percent.

The ministry noted that “throughout the second quarter, the upward trend in new industrial orders continued both overall and adjusted for major contracts”.

Goldman Sachs said the June data “appears to confirm the rise in sentiment in the manufacturing sector” signalled by other indicators.

“This is a strong report and the rise in domestic and non-euro area orders suggests that the underlying trend in orders is once again pointing upwards,” it said. “This is consistent with the information from business surveys.”

However, Natixis analyst Gareis Johannes pointed to the fact that, without the big-ticket items, industrial orders would have fallen by 0.7 percent.

“Thus, today’s reading is rather bad news than good news for the German industrial sector, indicating that it still struggles to recover from a weak performance early this year,” Johannes said.

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