German Industrial Orders Slip Further

German industrial orders fell for the third month in a row in March, official data showed Monday, disappointing the expectations of analysts who had hoped for a rebound.

New contracts for industrial firms fell back 0.9%, federal statistics authority Destatis said, far short of analysts’ predictions for growth of 0.6%, AFP reported.

The figure dashes hopes for a rebound in the vital sector for Europe’s powerhouse, completing a first quarter when indicators showed ebbing momentum after hectic growth last year.

Industrial indicators have fallen in step with other measures like business confidence, as players confront uncertainty over political events like Brexit and US President Donald Trump’s protectionist threats against China and the European Union.

“After dynamic growth in industrial orders especially in the second half of 2017, the first quarter of 2018 has brought predictably calmer developments,” the economy ministry in Berlin commented in a statement.

But the government economists added that “firms’ order books remain very full” for almost the next six months.

Domestic demand for German goods rose in March, by 1.5%, but fell 3% among customers in the 19-nation euro single currency zone and 2.5% in the rest of the world.

And the picture was varied across the sector, with a bright spot of 2.2% growth in orders for consumer goods makers, while capital goods firms fell back 1.8% and producer goods 0.3%.

Overall, “despite the slight setback in the first quarter, industrial activity should remain on an upward trend,” the economy ministry predicted.

Meanwhile, VP Bank Group analyst Thomas Gitzel said, “The economy is slowing down, that’s the sure take-away from today’s industrial orders data,” adding that some growth forecasts would soon have to be revised down.

The government last month cut its 2018 growth forecast to 2.3% from 2.4% and expressed concern about international trade tensions. “The debate about tariffs has probably created great uncertainty in Europe’s export-driven industry,” Gitzel added.

As Europe’s biggest exporter to the US, Germany is desperate to avoid an EU trade war with the United States.

In the run-up to a June 1 deadline for US President Donald Trump to decide on whether to impose steel and aluminum tariffs on the EU, Berlin is urging its European partners to be flexible and pursue a broad deal that benefits both sides.