German Industrial Orders Show First Increase in Six Months

May 7, 2009
Orders from abroad were up 5.6% while domestic orders rose 1.1%

Giving "hope for a normalization" in Europe's biggest economy, German industrial orders showed the first increase for six months in March, the government said on May 7.

The economy ministry said the seasonally adjusted, 3.3% rise from February "cannot even begin" to make up for recent months, with orders for goods made by the world's top exporter off a whopping 14.5% in the first quarter.

"But the latest numbers show that the hitherto unbroken plunge has broken its fall and that hope for a normalization can grow," the ministry said.

The rise -- economists had expected a moderate fall -- is the first piece of hard data to back up the government's prediction that the economy is set to grow slightly in 2010 after slumping a record 6% this year.

Orders from abroad were up 5.6% and those from within Germany rose 1.1%, with all three main industrial sectors reporting a pick-up in business.

"Of course, one rise doesn't imply an upswing yet. But the breathtaking adjustment in new orders observed since the Lehman collapse, which has virtually led to a freeze in global investment, finally appears to (be levelling) off," said UniCredit economist Alexander Koch.

Germany's recession, one of the worst among big economies, is pulling Europe into its worst downturn since World War II, with Brussels predicting this week that the 27-nation economy will shrink 4% this year.

Economy Minister Karl-Theodor zu Guttenberg said on April 29 that the economy should begin to "bottom out" by the end of this year. Germany is far from being out of trouble, however, and more data will be needed for experts to agree that Berlin is correct to predict growth of 0.5% next year.

Other forecasts are gloomier, with the International Monetary Fund expecting output to shrink 1% next year.

The economy ministry cautioned that there were a large number of very large, single orders recorded in March, something which may have skewed the data and made the picture out to be rosier than it is in reality.

Copyright Agence France-Presse, 2009

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