- Orders up 1.5% in November vs. estimate for 0.1% increase
- Gain driven by biggest jump in basic-goods orders since 2011
German factory orders rose more than economists anticipated in November as demand for basic goods surged the most in almost five years.
Total orders, adjusted for seasonal swings and inflation, gained 1.5 percent from October, when they were up a revised 1.7 percent, data from the Economy Ministry in Berlin showed on Thursday. The reading, which tends to be volatile, compares with a median estimate for an increase of 0.1 percent in a Bloomberg survey. Orders climbed 2.1 percent from a year earlier.
With unemployment at the lowest level since German reunification and wages rising, private consumption is driving growth in Europe’s largest economy just as government spending tied to an influx of refugees adds extra stimulus. Exporters are benefiting from a weaker euro as they turn their focus away from slowing emerging markets such as China and toward recovering economies such as the U.S.
“German companies aren’t allowing the various crises to spoil their optimism,” Torsten Windels, chief economist at NordLB in Hanover, said before the report. “Rising investments as well as an increase in private consumption will drive the German economy in 2016.”
The euro was up 0.1 percent on the day at $1.0794 at 8:30 a.m. Frankfurt time.
In a separate report, the Federal Statistics Office said German retail sales rose 0.2 percent in November from October, when they declined a revised 0.1 percent. Economists predicted a 0.5 percent increase.
Basic-goods orders rose 4.8 percent in November, driven by domestic demand, the ministry said in a statement. Total orders from within the country increased 2.6 percent. Euro-area orders fell 0.5 percent after a 2.6 percent jump in October, while demand from outside the currency bloc was up 1.4 percent. Bulk orders were slightly below average in November.
The BGA trade group estimates that German exports gained as much as 6 percent last year, with imports up about 4 percent. It predicts both will reach record highs in 2016.
Shipments to the U.S. jumped more than 20 percent in the 10 months through October from the previous year, while sales to China slipped 4.2 percent, according to data by the statistics office. Data for November will be released on Friday, alongside the latest industrial-production report.
“After orders receded in the third quarter, a moderate revival in manufacturing seems to be taking hold,” the ministry said. “Sentiment indicators in the industry also send positive signals.”