German Turnaround Confirmed as Industrial Orders Rise

German Turnaround Confirmed as Industrial Orders Rise

By sector, incoming orders for semi-finished goods fell by 3.6% month-on-month in December, while orders for capital goods and consumer goods increased by 3.6% and 1.7% respectively

FRANKFURT -- Germany appears to have put the worst of the crisis behind it, analysts said on Wednesday, with industrial orders on the rise, lending weight to the recent sharp gains in confidence indicators.

Industrial orders increased by 0.8% in December compared with November, after falling by 1.8% the previous month, the economy ministry said.

Analysts polled by Dow Jones Newswires had been penciling in a gain of 0.7% for December.

"There was an above-average volume of big-ticket orders," the ministry explained.

And while domestic orders declined by 1.2%, orders from abroad rose sharply by 2.4%.

By sector, incoming orders for semi-finished goods fell by 3.6% month-on-month in December, while orders for capital goods and consumer goods increased by 3.6% and 1.7% respectively.

Using a two-month comparison to iron out short-term fluctuations, orders rose by 0.5% in November and December combined compared with the preceding two months.

"At the end of last year, industrial orders picked up again, which bodes well for the overall trend in orders for the current year," the ministry said.

"Together with the improvement in business confidence, early indicators point to a end to the current phase of industrial weakness in the foreseeable future," the ministry said.

Analysts shared the ministry's confidence, especially as it appears to back up the recent strong rise in industrial sentiment indicators.

"All in all, German factory orders are back on to a positive trend in the fourth quarter of last year, which should continue in 2013," said Thomas Harjes at Barclays Research.

"This bodes well for our forecast of a swift recovery of economic activity currently underway in Germany, also reflecting a robust expansion again of industrial activity," the analyst said.

Last month, the widely watched Ifo business climate index rose to its highest reading since June and investor confidence is also on the rise, too.

Copyright Agence France-Presse, 2013

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