German factory orders unexpectedly plunged in September as demand from the euro region slumped, adding to signs the region’s debt crisis is damping growth in Europe’s largest economy.
Orders, adjusted for seasonal swings and inflation, fell 4.3 percent from August, when they dropped 1.4 percent, the Economy Ministry in Berlin said in a statement today. It’s the third straight month orders have declined. Economists forecast a 0.1 percent increase for September, according to the median of 34 estimates in a Bloomberg News survey. In the year, orders rose 2.4 percent when adjusted for work days.
The European Central Bank yesterday unexpectedly cut interest rates to boost growth in the 17-nation economy, saying a “mild recession” is on the cards as the debt crisis damps confidence. German unemployment unexpectedly rose for the first time in more than two years in October and Europe’s manufacturing industry contracted for a third month.
“The insecurity due to the debt crisis will be simply lethal for the economy if it continues like this,” said Ulrike Rondorf, an economist at Commerzbank AG in Frankfurt. With global demand also slowing “we can at best expect slight growth through the end of the year.”
Domestic factory orders fell 3 percent in September and export orders dropped 5.4 percent, led by a 12.1 percent plunge in demand from other euro-area countries, today’s report showed. Orders for investment goods declined 4.6 percent, while consumer goods orders rose 2.3 percent.
