German industrial orders dip again

BERLIN • Weak demand from domestic and euro zone clients led to a fourth straight monthly drop in German industrial orders in April, suggesting factories in Europe's largest economy will shift into a lower gear over the coming months.

Contracts for German goods were down 2.5 per cent from March after a downward revised drop of 1.1 per cent the previous month, Federal Statistics Office data yesterday showed.

The April reading significantly undershot a Reuters poll of analysts, who had predicted a 0.8 per cent rise.

DIHK economist Sophia Krietenbrink said it might signal a loss of economic momentum despite the fact that order backlogs at German manufacturers were still high. "Trade conflicts, in particular, are causing considerable uncertainty from outside," she said.

The decline was driven by a drop in domestic demand, though orders from clients in other euro zone countries also fell. A sector breakdown of the figures showed demand for capital and consumer goods fell while demand for intermediate goods rose.

The release followed a string of strong economic data that included retail sales posting a bigger-than-expected jump in April, unemployment reaching a record low last month, and business morale steadying despite the threat of a global trade war.

IMPACT OF TRADE CONFLICTS

Trade conflicts, in particular, are causing considerable uncertainty from outside.

'' DIHK ECONOMIST SOPHIA KRIETENBRINK, on the monthly drop in German industrial orders in April.

Germany's VDMA industry association said on Wednesday that engineering orders had jumped 12 per cent in April compared with a year before, with surging domestic demand offsetting a drop in contracts from euro zone partners.

The German economy grew 0.3 per cent on the quarter in the first three months of the year, and is expected to pick up speed in the April-June period.

For 2018 as a whole, the government forecasts 2.3 per cent growth.

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 08, 2018, with the headline 'German industrial orders dip again'. Print Edition | Subscribe