German industrial orders soaring
February 6, 2017
Higher demand for capital goods in Germany and abroad drove the biggest monthly increase in German factory orders in about one and a half years in December, the Economics Ministry announced on Monday.
Domestic demand rose by 6.7 percent in the month under review, while foreign orders increased by 3.9 percent. Bookings for the 19-member euro area soared by 10 percent in December.
The fresh data gave some reassurance that Germany's economic upswing would carry into 2017 despite growing political uncertainties such as a protectionist US trade agenda.
Shifting into higher gear
"Despite the uncertainties, the German economy is showing a more than robust development," Sal. Oppenheim economist Ulrike Kastens said in a statement, adding she now expected quarterly growth of around 0.6 percent in the first quarter of 2017, after a 0.5-percent expansion in the final three months of last year.
ING Diba analyst Carsten Brzeski warned "the coming months will definitely bring some negative surprises," pointing to the start of Brexit negotiations.
"Even so, today's data suggest that German industry could shift into higher gear in the first quarter."
Separate data from the German VDMA industry association showed on Monday that engineering orders fell by a staggering 15 percent on the year in real terms in December, driven by weaker demand from abroad and thus showing a completely different picture.
The overall strong orders figures followed mixed data after German business morale unexpectedly fell in January, signaling a more downbeat assessment of the outlook for Europe's largest economy.
hg/jd (AFP, Reuters)