German Machinery Orders Rebound in December on Euro-Area Demand

German plant and machinery orders rose in December as euro-area demand recovered, adding to signs that the 17-nation economy is beginning to emerge from recession.

Orders, adjusted for inflation, increased 4 percent from a year earlier after declining an annual 3 percent in November, the VDMA machine-makers’ association said in Frankfurt today. Domestic orders gained 1 percent and orders from outside Germany advanced 5 percent. Orders rose 3 percent in the fourth quarter, it said.

Economic and financial-market confidence in the euro area have started to return after the single-currency bloc succumbed to recession in the third quarter. That’s bolstering the export-driven German economy, Europe’s largest, which has outperformed most of its peers throughout the crisis as it refocused on faster growing markets in Asia and America.

“Foreign orders were mainly driven by demand from euro member states,” said Ralph Wiechers, VDMA’s chief economist. While orders declined 3 percent in 2012, that’s “still a rather respectable result, measured by the economic environment,” he said.

German growth slowed to 0.7 percent in 2012 from 3 percent in 2011 amid the sovereign debt crisis. The Bundesbank predicts an expansion of 0.4 percent this year. That compares to a 0.3 percent contraction the European Central Bank forecasts for the euro region.

German production of plant and machinery will increase 2 percent this year, VDMA forecast on Dec. 13.

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