Ger­many’s in­dus­try re­sis­tant to trade war

Business Day - - International Companies - Joseph Nasr Berlin

Strong de­mand from abroad drove an un­ex­pected rise in Ger­man in­dus­trial or­ders in Oc­to­ber, sug­gest­ing that ex­ports may still sup­port Europe’s largest econ­omy de­spite broad global trade fric­tion.

Con­tracts for “made in Ger­many” goods rose by 0.3%, data from the statis­tics of­fice showed on Thurs­day, as strong de­mand from the eu­ro­zone off­set a fall in do­mes­tic or­ders.

It was the third con­sec­u­tive monthly in­crease and com­pared with a con­sen­sus fore­cast for a fall of 0.4%, Septem­ber’s fig­ure was down­wardly re­vised to a mod­est rise of 0.1%.

The econ­omy min­istry said a slow­down in new car reg­is­tra­tions stem­ming from the in­tro­duc­tion of stricter pol­lu­tion stan­dards was still weigh­ing on or­ders. Bot­tle­necks were grad­u­ally clear­ing up.

The ef­fect of the pol­lu­tion stan­dards on new reg­is­tra­tions was re­flected in a 3.2% con­trac­tion in do­mes­tic de­mand. That com­pared with a 2.9% rise in for­eign or­ders, in­clud­ing a 7.3% in­crease in new or­ders from Ger­many’s eu­ro­zone part­ners, the data showed.

The Ger­man econ­omy, in its ninth straight year of ex­pan­sion, has been look­ing to do­mes­tic con­sump­tion and in­creased state spend­ing for growth as ex­porters have been caught up in trade dis­putes on goods tar­iffs that the US is try­ing to re­solve with both China and the EU.

Fi­nance min­is­ter Olaf Scholz told a news con­fer­ence in Berlin that he was hope­ful the US gov­ern­ment and the Euro­pean Com­mis­sion would reach a deal to re­move mu­tual tar­iffs on goods and per­ma­nently elim­i­nate Pres­i­dent Don­ald Trump’s threat to im­pose tar­iffs on cars made in Europe.

“We have many risks which could com­pro­mise our pos­i­tive [growth] di­ag­no­sis,” Scholz said.

“Pos­si­ble trade con­flicts could es­ca­late, but a hoped-for de-es­ca­la­tion could have the op­po­site ef­fect. Some mes­sages we’re hear­ing tell us it’s go­ing in the right di­rec­tion,” he said of talks about tar­iffs the US is hold­ing with ma­jor trade part­ners.

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