"The economic picture for Germany is still affected by the uncertainty in the euro-area economy"
- Heinrich Bayer, an economist at Deutsche Postbank AG (DPB)
Factory orders in Europe's powerhouse Germany declined for a second consecutive month in May, amid growing uncertainty over the economic recovery in Germany, as the Eurozone is struggling to emerge from its longest-ever recession. Data from the Economy Ministry in Berlin showed that orders, adjusted for seasonal swings and inflationary pressure, tumbled 1.3% from April, when they inched lower 2.2%. Economists, however, expected a 1.2% gain. On a yearly basis orders slid 2%, when adjusted for the number of working days. Report also reflected weak both internal and external demand, as domestic orders decline 2% in May, while foreign demand plunged 3.9%, mostly due to a weak demand from the Eurozone.
Earlier this month, economic data showed that activity in services and manufacturing sector improved, with the services PMI increasing to 50.4 in June, while analysts predicted it should hit 51.3. At the same time, the gauge of manufacturing activity declined to 48.6 from 49.4, below analysts' estimations for a 48.7 reading. As key sectors are experiencing an extended period of subdued new business trends, it is expected to become a drag on private sector employment, suggesting companies are cautious about the business outlook, even despite some positive direction of output volumes and the end of the first half of 2013.
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