Factory orders in Germany unexpectedly dropped in September after two consecutive months of increases, according to the German statistical office Destatis. The decrease is mainly due to the drop in demand from other Eurozone countries. The decline amounted to 0.6% mom in September, while the expectations were for an increase of 0.3%, after August there was an increase of 0.9%.
Orders from other countries in the Eurozone decreased by 4.5%, while those of Germany dropped by 1.1%. However, the orders from third countries outside Eurozone increased by 2.5%.
This year, the average monthly increase in factory orders in Germany was 0.1%. It is difficult to see how German industry would be able to pass on higher speed.
The European growth rate appears to be picking up. It’s still a modest rebound, but two econometric estimates advise that the macro trend is set to improve in the final months of 2016. However, the situation in Germany surprised the economists and reported drop.
Meanwhile, the Eurozone Retail PMI dipped back into the red, if only slightly, in September. The mild setback follows the uptick in August that lifted the index to its first growth reading since May. But it doesn’t help to learn that retailers reported that sales also fell from year-earlier levels.
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