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German industrial orders drop in January

Xinhua, March 5, 2015 Adjust font size:

German industrial orders dropped significantly in January, official data showed on Thursday, showing a contrast with a robust retail sector and upbeat sentiments and signaling that Europe's biggest economy still relied on consumption as its main growth engine.

Orders for German industrial products decreased by 3.9 percent in January on the previous month, data from German national statistical office Destatis showed. It was significantly lower than economists' expectation of an 1 percent decline.

Both orders from domestic and abroad went downward, Destatis said. While orders from inside Germany decreased by 2.5 percent, foreign orders fell by 4.8 percent, led by a weak demand from its euro zone partners which saw a plunge of 9 percent.

The statistical office said weak demands were mostly recorded for intermediate and capital goods, which declined by 3.8 percent and 4.2 percent respectively. Booking for consumer goods, meanwhile, only decreased by 0.6 percent.

German Economy Ministry attributed the sharp drop in January to the high increase of orders in the previous month, when the monthly growth was 4.4 percent, and a lack of bulk orders, insisting that the trend for orders and the industrial economy remained upward.

Analysts, however, said the figures on Thursday signaled that Europe's biggest economy was not yet gaining momentum from industrial sectors despite recent optimistic mood among enterprises, private consumption remained the main growth engine.

In January, German retail sales increased by 2.9 percent on the previous month thanks to optimistic morale of German consumers.

A survey by market research institute GfK showed that Germans' willingness to buy hit the highest level since December 2006 thanks to stable labour market, low interest rates and falling energy prices.

The institute expected private consumption, which drove an expansion of 1.6 percent in German economy, to grow by 1.5 percent in 2015 and continue to play a key role in supporting economic growth. Endit