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German industrial orders fall sharply in February

FRANKFURT (AFP) – German industrial orders fell more than expected in February, official data showed yesterday, as the economy ministry warned that “high uncertainty” over the war in Ukraine was likely to dampen the outlook for manufacturers.

New orders dropped by 2.2 per cent over the previous month, statistics agency Destatis said, the first dip in the indicator in four months.

Destatis said the decrease was mainly due to lower demand from abroad. Factory orders are closely watched as a preview of future economic activity in Europe’s manufacturing powerhouse.

February’s dip gives a “first taste of how the war in Ukraine and new uncertainties will affect the German economy”, tweeted ING bank economist Carsten Brzeski.

Analysts surveyed by financial data firm FactSet had expected a 0.5-per cent fall in February, as manufacturers continue to confront shortages of raw materials, high energy costs and supply chain bottlenecks.

The full impact of Russia’s February 24 invasion of Ukraine and the resulting economic sanctions against Moscow is not yet reflected in yesterday’s data, the economy ministry said.

“But the war leads to high uncertainty regarding the further development of demand,” the ministry said in a statement.

“The outlook for the coming months is therefore subdued,” it added.