German manufacturing new orders surged in June, driven by robust demand from abroad, thanks to a weaker euro, dispelling concerns of a slowdown in the largest euro area economy.
Factory orders rose a seasonally-and-calendar adjusted 2 percent from May, when they declined 0.3 percent, figures from the Federal Statistical Office showed Thursday. May's drop was downwardly revised from the 0.2 percent fall estimated initially. Economists had expected a mere 0.3 percent increase for the month. In April, orders grew 2.2 percent.
New orders are clearly in an upward trend, the German economy ministry said. The industry is likely to sustain the path of moderate growth in the coming months, it added.
Export orders jumped 4.8 percent in June following a 0.3 percent growth in the previous month. Orders from the euro area grew 2.3 percent and demand from other countries increased 6.3 percent.
In contrast, domestic orders declined 2 percent, falling for a third straight month.
"Today's numbers suggest that the positive impact from a weaker euro is currently more than offsetting any Chinese weakness or Eurozone uncertainty," ING Bank economist Carsten Brzeski said.
"While the jury on GDP growth in the second quarter is still out, with GDP only released at the end of next week, today's numbers show that the German economy could take the current positive momentum into the third quarter."
Capital goods orders surged 3.7 percent, marking the biggest gain since December. Meanwhile, the demand for intermediate goods declined 0.4 percent. Bookings for consumer goods decreased 0.6 percent.
Manufacturing orders grew 7.2 percent year-on-year in June after a 4.5 percent gain in the previous month. Economists had expected a 5.2 percent increase.
During the second quarter, orders grew 3 percent from the previous three months, with gains witnessed in all major groups. Again, the improvement was driven by foreign demand for German goods.
The German manufacturing sector expanded at a steady pace in July, logging its twenty-seventh successive monthly rise in production, survey data from Markit Economics showed Monday.
Business morale in the country unexpectedly improved in July after concerns due to the uncertainty regarding Greece and its future in euro eased, the Ifo survey revealed.
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