German factory orders drop
June 6, 2016
Factory orders in Germany contracted by 2 percent in April, marking the biggest monthly drop since July 2015. The fall defied predictions of analysts, who had expected orders to shrink only 0.5 percent.
"The retreat was spurred by a heavy drop in demand in non-eurozone countries," Carsten Brzeski, the chief economist at ING bank, told Reuters in response to the new figures, which were released by Germany's Economy Ministry on Monday.
"It demonstrates a weakness in China and with other global export partners," Brzeski added.
Dragging down the April numbers was a 4.3 drop in all foreign orders. But that number belies an even starker drop in orders from outside the eurozone, which were down 8.3 percent. Within the eurozone, countries ordered 2.5 percent more German goods.
Domestic orders were up 1.3 percent in April, the Economics Ministry said.
"Solid development at home will have a hard time compensating for weak exports," Dirk Schlotböller, an expert with the Association of German Chambers of Commerce and Industry (DIHK) in a flash analysis.
In March, a rise in large-scale orders from overseas customers gave German factories some breathing room. In contrast to April, it was domestic demand that continued to point downwards.
cjc/kd (Reuters, dpa)