German factory orders grow as Europe’s largest economy gains speed

German factory orders expanded for a second month as Europe’s largest economy picked up speed.

Orders, adjusted for seasonal swings and inflation, rose 1 per cent in March after expanding an upwardly revised 3.5 per cent in February, data from the economy ministry in Berlin showed on Monday.

The typically volatile reading compares with a median estimate for a 0.7 per cent gain in a Bloomberg survey. Orders were up 2.4 per cent from a year earlier, when adjusted for working days.

The Bundesbank said Germany’s economy probably gathered momentum in the first quarter on the back of strong consumer spending and a brightening outlook for manufacturers. Business confidence is at the highest level in almost six years, and data on Friday is forecast to show that growth accelerated in the three months through March.

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“Manufacturing orders continue to be vibrant,” the economy ministry said in a statement. “Economic conditions in manufacturing are favourable. This is also reflected by strongly improved business climate indicators.”

Orders were bolstered by demand from the 19-nation euro area, with investment goods up 7 per cent in the region and consumer goods surging 20.5 per cent.

Economists predict the ministry will report in separate release on Tuesday that industrial production fell 0.7 per cent in March after rising 2.2 per cent the previous month. – Bloomberg