European Industrial Orders Rise More Than Forecast on Intermediate Goods
European industrial orders rose more than economists forecast in February, led by demand for intermediate goods such as car engines.
Orders to industrial companies in the 16-nation euro area increased 1.5 percent from January, when they decreased 1.6 percent, the European Union’s statistics office in Luxembourg said today. Economists forecast an increase of 1 percent, according to the median of 20 estimates in a Bloomberg News survey. From a year earlier, February industrial orders jumped 12.2 percent.
Schneider Electric SA, the world’s largest maker of circuit breakers, is among companies projecting a revival in orders this year as businesses invest in new equipment. Europe’s manufacturing and services industries expanded more than economists forecast in April, while German business confidence reached a two-year high. The International Monetary Fund this week raised its 2010 forecast for worldwide growth.
“The euro-region recovery is continuing to gain momentum,” said Howard Archer, chief European economist at IHS Global Insight in London. “Even so, conditions are still pretty challenging and renewed relapses in activity remain highly possible.”
The euro was higher against the dollar after the data, trading at $1.3337 at 10:06 a.m. in London, up 0.3 percent on the day.
Gross domestic product in the euro area may rise 1 percent this year and 1.5 percent in 2011, the Washington-based IMF forecast on April 21. The U.S. economy may expand 3.1 percent in 2010, while China’s GDP is seen rising 10 percent.
In Germany, Europe’s biggest economy, business confidence improved this month to the highest since May 2008, the Ifo institute in Munich said today, citing a survey of 7,000 executives. Sentiment was helped by the euro’s 7 percent drop against the dollar this year, which is making European exports more competitive abroad.
Daimler AG, the Stuttgart, Germany-based maker of Mercedes- Benz cars, said this month it aims to increase deliveries twice as fast as 2010’s worldwide auto-market growth rate on demand for its new models. PSA Peugeot Citroen, Europe’s second-largest automaker, this week forecast “significant” operating income in the first half.
“We see a strong recovery of industrial activities after the sharp adjustment last year,” Schneider Chief Executive Officer Jean-Pascal Tricoire said on April 21. “New economies, led by Asia and the Middle East, confirm their robust growth momentum.”
Euro-area industrial orders for intermediate goods rose 2.6 percent in February from the previous month, when they increased 4.4 percent, today’s report showed. Orders for capital goods advanced 2.3 percent and demand for durable consumer goods increased 2.5 percent. Orders advanced 2.5 percent excluding heavy transport equipment such as ships and trains.
To contact the reporter on this story: Simone Meier in Dublin at email@example.com