German Factory Orders Jump in Encouraging Sign for Outlook

(Bloomberg) -- German factory orders rebounded in August on surging export demand for investment goods, suggesting the outlook for Europe’s largest economy remains relatively strong despite trade risks.

Orders jumped 2 percent from the previous month, more than forecast by economists. The increase in the volatile series is only the second this year, after demand for German-manufactured goods suffered amid quarrels with the U.S. over protectionist policies. Orders were down 2.1 percent on the year.

German Factory Orders Jump in Encouraging Sign for Outlook

The Bundesbank is still optimistic that momentum in Germany’s economy is fundamentally intact, underpinned by solid domestic fundamentals. But sentiment has suffered from threats of a global trade war. Manufacturing activity slowed to the weakest pace in more than two years in September, according to purchasing managers

Domestic orders-2.9%
Export orders5.8%
Basic-goods orders-0.1%
Investment-goods orders3.4%
     Non euro-area investment goods13.7%
Consumer-goods demand2.1%

“The strong order increase from outside the euro area shows that German industrial goods continue to be in demand globally, irrespective of trade conflicts,” the Economy Ministry said in a statement. “A positive economic trend should take the upper hand again in the fourth quarter.”

Data for industrial production in August are due on Monday.

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