German Factory Orders Increase in Sign Economy Gaining MomentumAlessandro Speciale and Stefan Riecher
German factory orders rebounded in December amid signs that momentum in Europe’s largest economy is accelerating.
Orders, adjusted for seasonal swings and inflation, rose 4.2 percent after a decline of 2.4 percent in November, data from the Economy Ministry in Berlin showed on Thursday. The gain in the typically volatile figures was the biggest since July and compares with a median estimate of 1.5 percent in a Bloomberg News survey. Orders climbed 3.4 percent from a year earlier.
The German economy has overcome the “weak phase” it hit early last year and stands to benefit from slumping oil prices, the Bundesbank said last month. Further support might come from the European Central Bank’s stimulus measures which are intended to bolster the euro-area economy and which have weakened the single currency, making exporters more competitive.
“The prospects for the German economy are not too bad,” said Johannes Gareis, an economist at Natixis in Frankfurt. “It can benefit from the generally improving economic conditions, from oil to the lower exchange rate.”
Orders from the euro area led gains in German factory orders in December, rising 5.9 percent, while domestic demand climbed 3.4 percent. Orders for basic goods increased 2.8 percent and investment goods advanced 5.7 percent. Consumer goods fell 0.6 percent.
“Orders developed positively at the end of the year,” the ministry said in a statement. “The indicators speak clearly for the weak phase of last year having been overcome.”