German industrial orders surprise with October boost

FRANKFURT am Main (AFP) – Industrial firms in Germany beat analysts’ expectations by reporting slightly increased orders in October, official data showed yesterday, suggesting a run of strong growth has further to go before petering out.

New contracts – seen as an indicator of future growth in Europe’s largest economy – added 0.5 per cent month-on-month, figures from federal statistics authority Destatis showed, where analysts surveyed by Factset had predicted a slight decrease.

The statisticians also revised the previous month’s growth in orders up slightly, to 1.2 per cent.

Both domestic and foreign demand for German goods contributed to the October increase, with 0.4-per cent growth in orders at home and 0.5-per cent expansion abroad.

But new contracts from Germany’s neighbours in the 19-nation eurozone fell by 1.2 per cent, while demand from the rest of the world increased 1.6 per cent.

Manufacturers of capital and consumer goods both saw increased orders, but producer goods makers reported falling demand.

“Ordering activity increased for the third month in a row in October, overall a very active development,” the economy ministry in Berlin commented in a statement.

The government economists however noted “below average” large orders for items like aircraft weighing on the results.

A two-month comparison of September and October versus July and August – which the ministry argues is more representative of underlying trends – showed growth in orders of 3.4 per cent.

Surveys among German business leaders show confidence at an all-time high, with economic growth powered by domestic consumption, a construction boom and growth in investments, while foreign demand for the nation’s goods remains unslaked.

Combined with those factors, yesterday’s results mean “the business cycle in industry should remain on a strong upward trend,” the ministry predicted.