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German Factory Orders Fall, Retail Sales Rise


Germany's manufacturing new orders decreased for the first time in four months in November and the fall was worst than expected, while retail sales grew at the fastest pace in seven months.

Factory orders decreased a calendar and seasonally adjusted 1 percent from October, when they grew 0.2 percent, revised from 0.3 percent reported earlier, preliminary data from Destatis showed on Monday.

Economists had forecast a modest decline of 0.1 percent. The latest fall was the most severe since a 3.6 percent slump in June.

Retail sales rose a calendar and seasonally adjusted 1.4 percent from October, when they edged up 0.1 percent, revised from a 0.3 percent fall. Economists had expected a 0.4 percent increase.

"The drop in new orders after three consecutive increases will support the pessimists' view of a longer-lasting slowdown of the German industry, while the surge in retail sales will support the optimists' view of solid domestic demand preparing the grounds for an economic rebound," ING economist Carsten Brzeski said.

Higher order backlog in the manufacturing sector suggests that the industrial economy is gathering some momentum, albeit with subdued momentum, the economy ministry said.

The automotive industry is making progress tackling the WLT emission tests problem and registered a noticeable gain of 4.5 percent in orders in November, the ministry added.

Domestic orders increased 2.4 percent and decreased 3.2 percent from the previous month.

Demand from the euro area dropped 11.6 percent, while orders from other countries grew 2.3 percent.

Orders for manufacture of intermediate goods and consumer goods decreased 4.4 percent and 3.2 percent, respectively, in November, while that for capital goods increased 1.4 percent.

On a year-on-year basis, factory orders decreased 4.3 percent in November after a 3 percent drop in October. Economists had expected a 2.7 percent decline.

Retail sales increased 1.1 percent year-on-year in November after a 5.2 percent rise in October, revised from 5 percent. Economists were looking for a 0.4 percent fall.

Elsewhere on Monday, survey data from IHS Markit showed that the German construction sector expanded at the fastest pace in seven months in December, led by strong growth in housing activity.

The German Construction Purchasing Managers' Index, or PMI, rose to 53.3 from November's 51.3. A PMI reading above suggests growth in the sector.

Activity and new orders grew at faster rates, thanks to milder-than-usual weather in some areas.

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