The Eurozone’s largest economy has been teetering on the edge of recession for some time and there was yet more disappointing data for Germany today.
According to the Berlin based Economy Ministry German factory orders experienced their second consecutive slump, dropping 3.3 per cent from August. The figure now stands at 4.7 per cent lower than the previous year.
Economists involved in a Bloomberg survey forecast a decline of just 0.4 per cent.
As Nick Matthews, a senior economist with Nomura International Plc, asserted: ‘Germany’s economy is performing better than most of the others in the euro area, but it won’t generate strong growth in the current quarter. A contraction is more likely.’
Today’s report showed that the drag in Eurozone exports as a whole resulted in German export orders plummeting by 4.5 per cent. Meanwhile, German domestic factory orders, consumer-goods orders and investment-goods orders all dropped, down by 1.8, 1.7 and 2.4 per cent from August respectively.
Although Germany has fought the Euro crisis valiantly – and so far managed to avoid the dire economic circumstances experienced by other members of the 17 nation currency bloc – this latest result is a blow for the European superpower.
The Economy Ministry stated that: ‘the weak economic environment for the Euro area and in the broader global economy is having a bigger impact on demand for German industrial goods. Therefore industrial production may weaken further in the months to come.’
This disappointing figure follows recent statistics which showed an increasing unemployment rate and dented business confidence.
A senior European economist with the Frankfurt branch of Barclays Plc described the data as ‘a catastrophe and very bad news’. Thomas Harjes continued: ‘We have a huge problem in the rest of the Euro area that now seems to be reaching Germany and its labour market. For the coming quarters, the economic outlook is quite gloomy.’
Following the news the Euro declined against its major competitors. Check out our Breaking News section for the latest stories affecting European economies and our Currency News section for current Exchange Rates.
As of 13:50 pm
The Pound to Euro exchange rate is currently trading at 1.2483
The Pound to US Dollar exchange rate is currently trading at 1.5978
The Pound to Australian Dollar exchange rate is currently trading at 1.5310
The Euro to US Dollar exchange rate is currently trading at 1.2799
The Euro to Pound exchange rate is currently trading at 0.8010
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