Euro zone industrial new orders fell more sharply than expected in May, data showed today, adding to worries about manufacturers' ability to ride a developing economic slowdown.
New orders in the 15 countries sharing the euro declined 3.5 per cent month-on-month and 4.4 per cent year-on-year, European Union statistics office Eurostat said.
Economists polled by Reuters had expected a 1.3 monthly fall and a 1.9 per cent annual gain.
Eurostat also revised down its data for April to a 2 per cent monthly gain from a previously reported 2.5 per cent gain. The year-on-year rise in April was 12.3 per cent.
Excluding the highly volatile orders for ships, trains and planes, orders in April declined by the same figures as the headlines ones - 2.5 per cent month-on-month and 4 per cent year-on-year.
New orders are an indication of future industrial production and therefore overall economic activity, which in turn may impact the monetary policy of the European Central Bank.
Analysts said the weak data bolstered the case against further ECB rate hikes, after the bank increased its main rate to 4.25 per cent this month from 4 per cent to fight resurgent inflation, which hit a record 4 per cent in June.
Data showed last week euro zone industrial output posted its biggest monthly fall in May since 1992, and business sentiment surveys are weak, suggesting a significant slowdown in the second quarter after a 0.7 per cent quarterly rise in the first three months of 2008.
Eurostat said the biggest monthly fall in industrial orders was in Italy, 6.4 per cent, and Spain, 5.1 per cent. In Germany, the euro zone's biggest economy, orders fell by 1 per cent.