German Factory Orders Slump With Virus Shutdown Freezing Economy
The European Central Bank sees output in the currency bloc falling between 5% and 12% this year.
(Bloomberg) -- German factories saw demand collapse in March, when measures to contain the coronavirus brought the economy to a sudden halt.
Orders fell 15.6% from the previous month, the most since data collection started in 1991 and more than economists predicted. While all sectors were affected, investment goods plunged heavily. The Economy Ministry warned of big declines in production due to the virus.
The report comes as forecasters struggle to put a number on the economic damage caused by the pandemic. The European Central Bank sees output in the currency bloc falling between 5% and 12% this year. The European Commission presents its latest forecast at 11:00 a.m. Brussels time.
As a manufacturing powerhouse, Germany has been particularly affected by factory closures, supply-chain disruptions and a global erosion of demand. The country’s carmakers have lobbied the government for support for the crucial industry.
Yet talks with Chancellor Angela Merkel ended inconclusively on Tuesday, with a decision postponed until early June. BMW lowered its automotive profit outlook just hours later, saying the pandemic fallout is lasting longer than expected.
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