German Factory Orders Gained in December on Demand From Abroad
February 06, 2012, 6:25 AM ESTBy Jeff Black
Feb. 6 (Bloomberg) -- German factory orders rose in December, driven solely by demand from outside the euro area.
Orders, adjusted for seasonal swings and inflation, rose 1.7 percent from November, when they slumped 4.9 percent, the Economy Ministry in Berlin said today. Economists forecast an increase of 1 percent, according to the median of 36 estimates in a Bloomberg News survey. From a year ago, orders were unchanged in December when adjusted for work days.
German business confidence jumped to a five-month high in January, adding to signs that Europe’s largest economy may be weathering the region’s debt crisis and could avoid a deep recession. At the same time, the government and the International Monetary Fund have reduced their 2012 growth forecasts as budget cuts across the 17-nation currency area damp demand for Germany’s goods in its biggest export market.
“We’re seeing stabilization on all fronts,” said Jana Meier, an economist at HSBC Trinkaus & Burkhardt AG in Dusseldorf, Germany. “The risk for the German economy is that governments across the euro area implement additional austerity measures.”
Orders from euro-region nations fell 6.8 percent in the month, today’s report showed. Domestic orders slipped 1.4 percent. Orders from outside the euro area jumped 12.3 percent, more than compensating for their 10 percent decline in November. Demand for investment goods rose 2.8 percent in December and orders for consumer goods increased 1.9 percent.
Fourth-Quarter Contraction
The Economy Ministry said orders fell 1.4 percent in the fourth quarter of last year from the third.
Siemens AG, Germany’s largest engineering company, reported fiscal first-quarter earnings on Jan. 24 that missed analysts’ estimates and warned that its profit targets for this year have become more challenging to reach.
The IMF on Jan. 24 cut its forecast for German growth this year by one percentage point to 0.3 percent, citing a growing threat of recession across the single currency area.
Bundesbank President Jens Weidmann said that view is “too pessimistic.” The Frankfurt-based central bank forecasts 0.6 percent growth for 2012.
Robert Bosch GmbH, the world’s biggest car-parts supplier, said on Jan. 25 that revenue rose 8.8 percent last year, driven by expansion in its home European markets. The Stuttgart-based manufacturer forecasts sales growth of between 3 percent and 5 percent in 2012.
European investor confidence rose to a seven-month high in February, the Sentix research institute said today. In December, the European Central Bank lent euro-area banks 489 billion euros ($638 billion) for up to three years in an effort to unlock freezing credit markets.
Since then money-market rates and the yields on Spanish and Italian government debt have fallen, signaling the sovereign debt crisis may be easing.
--With assistance from Jana Randow and Alex Webb in Frankfurt and Kristian Siedenburg in Vienna. Editors: Matthew Brockett, Simone Meier
To contact the reporter on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
