German industrial orders fall in latest economic blow

FRANKFURT: German industrial orders fell in October after recording a strong jump the previous month, official data showed Thursday, the latest sign of weakness in the country’s crucial manufacturing sector.

New orders, closely watched as an indicator of future business activity in Europe’s biggest economy, fell 1.5 percent month-on-month, according to preliminary data from federal statistics agency Destatis.

But the agency revised up the reading for September by three points to an increase of 7.2 percent, because of a large order in ship manufacturing that was reported late.

Still, the renewed fall in October was bad news for Germany’s export-driven economy, which has been battling a slowdown in its factories, weak demand and a host of other deep-rooted challenges.

The data “suggests that a sustained economic turnaround in industry is not yet in sight”, the economy ministry said in a statement.

New orders in October were dragged down by large declines in the automotive sector, currently facing multiple headwinds, as well as the manufacture of machinery and equipment, Destatis said.

But there were improvements when it came to orders for manufacturing of metals, computer and electronic products, it said.

When large orders were excluded, the figure barely changed from September, and on a less volatile three-month comparison it was 2.7 percent higher.

LBBW bank analyst Elmar Voelker struck an upbeat note, saying the fall in October was “not as bad as feared” and the trend in recent months showed “a small glimmer of hope, as it is now pointing slightly upwards”.

The German government forecasts that the economy will shrink 0.2 percent this year, its second straight year of contraction, before a recovery in 2025.