German factory orders unexpectedly fell for a second month in February in a sign Europe’s largest economy is still prone to risks.
Orders, adjusted for seasonal swings and inflation, fell 0.9 per cent after a revised decline of 2.6 per cent in January, data from the Economy Ministry in Berlin showed on Wednesday.
Orders slid 1.3 per cent from a year earlier. While German business confidence rose for a fifth month in March, underscoring a Bundesbank projection for strong growth at the beginning of the year, instability from Greece to Russia highlights the risks for the recovery.
The European Central Bank’s quantitative-easing program has yet to show its full impact on the euro-area economy, where annual consumer prices have declined since December.
“The crises that we have in countries like Greece and Russia could become once again relevant, though at the moment they don’t look like a big risk,” said Michael Holstein, an economist at DZ Bank in Frankfurt.
“The German economy is in very good shape at the moment.” Consumer-goods orders surged 2.9 per cent in February from the previous month, and domestic demand for investment goods was up 1.9 per cent, according to the report. Export orders from abroad declined 1.6 percent.
The Economy Ministry had initially reported a 3.9 per cent drop in January factory orders.
“Due to weak bulk orders, demand was significantly weaker in the first two months” of the year, the ministry said in a statement. “At the same time, sentiment indicators are sending positive signals.
Overall, the trend in the industry should continue to point moderately upward.” German manufacturing activity rose to the highest level since April 2014, a purchasing managers survey by London-based Markit Economics showed on April 1.
Bloomberg
