Ger­man or­ders post strong­est quar­terly rise in more than 4 years

The Pak Banker - - BUSINESS -

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.

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