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German Factory Orders Log Unexpected Growth


Germany's factory orders increased unexpectedly in October helped by demand from domestic market and non-euro area economies.

New orders in manufacturing climbed 0.5 percent month-on-month in October, but slower than the revised 1.2 percent rise in September, figures from Destatis revealed Wednesday. Orders were forecast to fall 0.2 percent.

For the third time in a row, order activity exceeded its high level reached in November 2007 before the onset of the economic and financial crisis, Destatis said.

However, excluding large orders, new orders dropped 1 percent in October from the previous month.

Manufacturing turnover dropped 2.1 percent month-on-month in October, bigger than September's 1.2 percent fall.

Domestic and foreign orders rose 0.4 percent and 0.5 percent, respectively. Incoming orders from the Eurozone declined 1.2 percent, while new orders from the rest of the world increased 1.6 percent.

On a yearly basis, factory order growth eased to 6.9 percent in October from 9.7 percent in September. Economists had forecast 7 percent expansion.

The economy ministry said growth in orders and solid business confidence pointed to strong upward trend in the manufacturing sector.

Germany's industrial production data is due on December 7. Economists forecast production to rebound 1 percent in October after falling 1.6 percent in September.

Elsewhere, results of the Purchasing Managers' survey for the German construction sector showed signs of losing momentum in November. The PMI dropped to 53.1 from 53.3 in October.

After falling for the fourth month in a row, the headline index hit its lowest level since January.

New orders in construction dropped for the first time in more than a year. Constructors took on new staff and raised their purchases of raw materials as they pressed on with outstanding projects, but in both cases the rate of growth eased further from recent peaks.

Business confidence towards the outlook also moderated to its lowest in 12 months in November.

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