Factories in the euro zone saw demand shrink by over a third in January from a year earlier, the biggest ever such drop, data showed today.
Industrial new orders in the 16 countries using the euro fell 3.4 per cent month-on-month in January for a 34.1 per cent annual decline, the steepest fall since measurements started in 1996, European Union statistics office Eurostat said.
Eurostat also revised down December order figures to -8.0 per cent on the month and -23.8 per cent year-on-year, from previous readings of -5.2 per cent and -22.3 per cent respectively.
The data pointed to deep recession in the currency area as the world struggles with the worst financial crisis in decades. Car makers and other industries face stoppages and governments are launching aid programmes.
Demand fell for all categories of goods, although producers of non-durable consumer goods suffered the least, Eurostat said.
Germany, the euro zone's largest economy, saw the heftiest orders decline in the currency area -- by 7.6 per cent month-on-month and 37.7 per cent annually.
In France, the second-biggest economy in the bloc, they fell by 1.4 per cent from December and 30.9 per cent from a year ago.
But the data offered some hope for Ireland, which has been hit especially hard by the crisis in the euro zone, showing a 16.6 per cent increase in orders month-on-month for a 7.2 per cent annual gain.
The figures strengthened expectations that the European Central Bank would cut interest rates once more at its meeting next week, after it cut borrowing costs to an all-time low of 1.5 per cent.
Eurostat said orders excluding volatile transport equipment -- motor vehicles, ships, trains and planes -- dropped by 3.3 per cent on the month and 34.1 per cent year-on-year.
The figures for capital goods plunged 4.4 per cent from the previous month and 39.7 per cent in annual terms. For durable consumer products, orders fell by 1.1 per cent and 25.7 per cent respectively.
Non-durable consumer goods declined 2.3 per cent on the month and 10.6 per cent year-on-year.
Eurostat also said that in the wider 27-nation European Union, industrial new orders fell by 2.2 per cent month-on-month and 30.7 per cent annually.
Reuters