German factory orders dip but economy continues upward trend
ZURICH: German factory orders fell in November as demand for investment goods dropped, though the Economy Ministry said the trend remains upward.
Orders, adjusted for seasonal swings and inflation, slid 0.4% after a revised 0.7% gain in October, the ministry said yesterday. While the decrease snapped three month of gains, the number is typically volatile and orders were up 8.7% from a year earlier.
“Overall, orders in the second half of 2017 developed extremely dynamically. This lays the foundation for a strong start to the year in industry,” the Economy Ministry said in a statement. “In November, fluctuations in large orders were the main reason for the negative result.”
Yesterday’s report showed that domestic factory orders fell 0.4% in November and those from nations outside the eurozone slid 1.2%, while orders from the rest of the currency bloc increased 0.7%. The ministry said that despite the most-recent drop in investment orders, the category continues to drive growth in demand.
Germany is in the midst of an economic boom, with exporters benefiting from improving global trade and record-low unemployment buttressing domestic spending.
Manufacturing has been leading the expansion in output, with private-sector activity last month hitting the highest level in two decades.
Yet at the same time, and in common with the euroarea as a whole, price pressures have failed to build at a similar pace and wages have been slow to rise.
Bundesbank President Jens Weidmann has said he expects the state of affairs for pay to change in Germany. — Bloomberg