Uncertainty over global outlook hits German factory orders

German factory orders unexpectedly failed to rise in May as uncertainty over the global outlook deterred demand for goods.

Orders, adjusted for seasonal swings and inflation, were unchanged from April, when they fell a revised 1.9 per cent, data from the economy ministry showed on Wednesday. Economists surveyed by Bloomberg had predicted a 1 per cent rise in the data, which is typically volatile. Orders dropped 0.2 per cent from a year earlier.

Lacklustre global growth, tepid earnings, and the impending UK referendum on European Union membership have all weighed on confidence this year. The British vote in June, in which the nation opted to quit the EU, could further weaken the German economy, Bundesbank president Jens Weidmann said last week in Munich.

Domestic demand dropped 1.9 per cent and orders from outside the euro area slid 0.3 per cent, the data showed. Orders for consumer goods weakened 0.4 per cent.

Euro zone orders jumped 4 per cent, the data showed, and investment goods climbed 1.9 per cent.

Bloomberg