German industry surprises with slump in orders
German industry suffered an unexpected slump in orders in October due to falling demand from abroad. New business shrank by 3.7 percent compared to the previous month, according to the Federal Statistical Office. Economists surveyed by the Reuters news agency had expected growth of 0.2 percent. The negative development was mainly due to a lack of large orders.
In August (plus 1.9 percent) and September (plus 0.7 percent), order growth had still been sufficient. This means that incoming orders from August to October were 4.6% lower than in the previous three months.
"A sustained recovery in the industrial economy is not expected until next year," explained the Federal Ministry of Economics. Rising interest rates, high energy prices and the sluggish global economy are currently weighing on demand, which is why Germany is threatened with a recession. "The budget crisis, which is unsettling many companies, also points to a certain contraction of the German economy in the winter half-year," said Commerzbank chief economist Jörg Krämer.
Domestic orders rose by 2.4 percent in October compared to the previous month. However, foreign demand slumped by 7.6 percent. A large part of the weak development can be attributed to mechanical engineering: In this important sector, orders fell by 13.5 percent overall, after increasing by 9.8 percent in September.
Manufacturers of metal products, metal production and processing, electrical equipment and the automotive industry also received fewer orders. In contrast, new business in vehicle construction - which includes aircraft, ships and trains - grew by 20.2 percent. There were many large orders here. Turnover in the manufacturing sector also fell in October: it was 0.5% lower than in the previous month. In September, there had been a decline of 1.4 percent.
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The slump in orders in the German industry also affected foreign business, resulting in a decrease of 7.6% in October. This negative trend in the industry is causing concerns, with economists warning of a potential recession due to rising interest rates, high energy prices, and a sluggish global economy.
The German industry's slump in orders, primarily due to falling demand from foreign markets, is a concern for industries heavily reliant on international business, such as mechanical engineering, which experienced a 13.5% decrease in orders in October.
Source: www.ntv.de
