German factory orders slump point to renewed recession fears

Factory orders in Germany fell by 0.4 percent in October compared to a month earlier. This is according to figures from the German Federal Statistical Office. On average, economists had expected an increase of 0.4 percent.

In September, orders for German factories went up by a revised 1.5 percent. Previously it was an increase of 1.3 percent. On an annual basis, German factory orders contracted by 5.5 percent, following a decrease by a revised 5 percent a month earlier.

According to the statistics office, there was a considerably weaker domestic demand on a monthly basis. Foreign demand rose, thanks to more orders from countries in the euro zone. Orders from the rest of the world fell.

In a reaction, ING economist Carsten Brzeski writes that the order book decline in German industry is continuing and that 2019 will probably be the second year with a weaker inflow of new orders. The industry in Europe’s largest economy is struggling with global trade tensions, the weakening economy, problems in the automotive sector and uncertainty surrounding brexit.

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