German factory orders declined unexpectedly in August due to a fall in euro area demand, while overall shipments from the largest Eurozone nation recovered from July.
Confounding expectations for a 1.1 percent rise, factory orders logged a 0.3 percent month-on-month drop in August. This was the second consecutive decrease in orders, figures published by the Federal Ministry of Economics and Technology revealed Tuesday.
Nonetheless, the rate of decline was slower than the 1.9 percent drop seen in July.
August's decline largely reflects weakness in foreign demand, particularly euro area orders. Domestic orders advanced 2.2 percent from July, which was offset by a 2.1 percent fall in foreign orders. Orders from Eurozone were down 2.9 percent.
Meanwhile, factory orders grew at a faster pace of 3.1 percent from last year, following a 2.3 percent rise in July. But the annual rate remained below the 4 percent expected growth.
Data released earlier in the day by the Federal Statistical Office showed a wider trade surplus in August.
Exports rebounded with a 1 percent month-on-month gain, reversing July's 0.8 percent fall. At the same time, imports rose 0.4 percent, slightly faster than the 0.3 percent increase seen in July.
With exports increasing at a faster rate, the trade surplus widened to EUR 15.6 billion in August from EUR 15.0 billion in July.
Meanwhile, the current account surplus decreased to EUR 9.4 billion from EUR 14.2 billion in July.
On a yearly basis, exports and imports decreased 5.4 percent and 2.2 percent, respectively in August.
Today's data showed that the German economy is only gradually recovering from the weak start of the third quarter, Carsten Brzeski, an economist at ING Bank NV said.
Bundesbank in its monthly report in September said economic growth will continue in months ahead as there is noticeable improvement in expectations for production and exports.
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