Related News:
European Industrial Orders Increased Twice as Much as Projected in August
European industrial orders increased more than twice as much as economists forecast in August, led by demand for capital goods such as machinery.
Orders in the 16-nation euro area jumped 5.3 percent from July, when they fell 1.8 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast a gain of 2.2 percent, the median of 14 estimates in a Bloomberg News survey showed. In the year, industrial orders rose 24 percent after rising 12 percent in July.
The euro-area recovery is showing signs of holding up in the face of governments’ budget cuts and cooling global demand. Schneider Electric SA, the world’s largest maker of circuit breakers, raised its second-half sales forecast on Oct. 20. In Germany, business confidence unexpectedly rose last month and euro-region manufacturing growth accelerated.
Orders “boost hopes that the manufacturing sector can continue to do well in the fourth quarter,” said Howard Archer, chief European economist at IHS Global Insight in London. “However, the suspicion is that manufacturers will find life tougher over the coming months.”
The euro was little changed after the release, trading at $1.4044 at 11:48 a.m. in Frankfurt, up from $1.3954 on Oct. 22.
Orders for capital goods rose 8.1 percent from the previous month, today’s report showed. Orders for intermediate goods increased 3.4 percent, while demand for durable consumer goods jumped 5.4 percent. Orders excluding heavy transport equipment such as ships and trains rose 4.1 percent in the month.
‘Economic Dent’
World output growth will probably weaken to 4.2 percent in 2011 from 4.8 percent in 2010, the International Monetary Fund said on Oct. 6. The euro-region economy may expand 1.7 percent this year and 1.5 percent in 2011, it said.
Schneider, based near Paris, said last week that revenue jumped 38 percent in the third quarter. Daimler AG Chief Executive Officer Dieter Zetsche said on Oct. 22 that he expects the world’s second-largest luxury carmaker to increase Chinese deliveries by a “double-digit” percentage in 2011.
So far, the euro region is showing few signs of slowdown. European confidence in the economic outlook unexpectedly improved in September, industrial output rose more than economists forecast in August and German manufacturing growth accelerated in October.
Nevertheless, the euro’s 8 percent appreciation against the dollar over the past three months is threatening to curb exports just as governments from Spain to Ireland cut spending. While Volkswagen AG, Europe’s largest carmaker, said on Oct. 22 that nine-month profit jumped more than sixfold, helped by China, it forecast growth in the current quarter will slow.
“The euro region’s economic dent might not be as pronounced as some people might have feared,” said Karsten Junius, an economist at Dekabank in Frankfurt. “Growth momentum is weakening but we’re still on a good level overall.”
To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net
To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net
Rate These Stories
Rate this Page