German orders post strongest quarterly rise in more than 4 years
BERLIN: German industrial orders recorded their biggest increase in the April-June period since early 2011, thanks mainly to strong foreign demand despite a slowdown in China and uncertainty caused by the Greek debt crisis. Factories in Europe's largest economy received 3.0 per cent more contracts for goods on average in the second quarter than in the first, data from the economy ministry showed on Thursday. On a monthly basis, orders climbed by 2.0 per cent in June, smashing the Reuters consensus forecast for a 0.2 per cent gain and overshooting even the highest estimate for a 1.5 per cent-increase, though that was partly due to strong bulk orders. "Boom. German industrial orders just defied any concerns about a slowdown of the economy due to the Chinese slowdown or Greek turbulence," said Carsten Brzeski, an economist at ING, adding that the weaker euro was helping.
"Today's numbers show that the German economy could take the current positive momentum into the third quarter," he said. Preliminary second-quarter German gross domestic product (GDP) data is due to be published next Friday. The finance ministry has said the economy probably expanded by around 0.3 per cent in the April-June period - the same rate as in the first quarter - as domestic demand provided key support while foreign trade also picked up. But Andreas Rees, an economist at Unicredit, sounded a note of caution about the volatile orders data, saying the aircraft industry - probably Airbus - was probably behind a surge in bulk orders and that, excluding such factors, demand for goods made in Germany most likely rose by a weaker 0.3 per cent on the month in June. Nonetheless, he said a strong performance by German businesses in the second quarter showed optimism was justified. A breakdown of Thursday's data showed factories' foreign order books were 4.8 per cent fuller while their domestic orders fell by 2.0 per cent. While capital goods orders surged, appetite for consumer products and intermediate goods was weaker than in May.