Factory orders in Germany decreased surprising in June 2016

The factory orders in Germany decreased surprising in June 2016 and remained well above the market expectations. The factory orders fell slightly by 0.4% in June on a monthly and seasonally adjusted basis, while the economists and market participants expected growth of 0.4%. For comparison in the previous month, factory orders posted a revised growth of 0.1%, while the preliminary data were for zero growth. On an annual basis, orders were down 3.1% at the end of the sixth month of the year.

The domestic demand increased by 0.7%, but foreign orders decreased by 1.2%. The new orders from the Eurozone fell by 8.5%. In contrast, those from other countries increased by 3.8%. Despite the difficult economic conditions globally and concerns about Brexit, the German economy remains relatively strong.

The business climate in German industry and the trade account in July decreased less than expected. In Numbers – in July it declined from 108.7 points to 108.3 points, but economists had expected a substantial decline to 107.5 points.

The PMI index for services rose to 54.4 in July, confirming the positive trend of increasing activity in the services sector since June. The market expected the index to rise to 54.6 from 53.7 in June.

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