- Economy Ministry
German factory orders increased more than expected in March due to strong foreign demand especially from countries outside the Euro zone, in a sign that a robust start to the year for Europe's number one economy may extend into the second quarter. According to the Federal Statistical Office, new orders in manufacturing climbed 1.9% in March compared to the previous month. It also revised February's decrease to a decline of 0.8% over January, compared to the 1.2% drop initially reported. While domestic orders slipped by 1.2%, foreign demand rose 4.3%, with orders from Euro zone countries edging up 1.1% and bookings from countries outside the currency bloc soaring by 6.2%. For the whole first quarter, industrial orders climbed 0.5%, with bookings from abroad increasing by 2.0% and domestic orders falling by 1.3%. The surprisingly strong March figure suggests that industrial output is likely to pick up in the coming months after making a solid start to the year. Leading economic institutes said the German economy probably grew by around 0.6% on the quarter in the January-March period, twice as much as in the fourth quarter.
Separately, sentiment in the Euro zone improved marginally in May, but expectations remained subdued suggesting stimulus from the ECB is failing to calm concerns about global growth. The Sentix index, tracking morale among investors and analysts in the Euro zone, ticked up to 6.2 from 5.7 in April.
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