Factory Orders in Germany Decline Amid Economic Uncertainties

Published Date : Jan 08, 2015

Germany, Europe’s largest economy, is showing slow recovery of confidence. Orders for German factories saw a decline for the first time in three months in last year’s November. Orders for German factories saw a reduction by 2.4 percent after increasing by 2.9 percent in October. Economists had predicted a decline of nearly 0.8 percent, but they actually saw a reduction by 0.4 percent from the earlier year. 

Germany has been able to avoid a recession narrowly in the mid of 2014, and the economy has managed to gain only a modest start until the year’s fourth quarter. While surveys state that the economy of Germany is improving, the entire Europe is struggling with sluggish growth due to falling prices and political instability in Greece.

With the economic confidence rising up for Germany, prospects for gaining more orders in the fourth quarter are better, Germany’s Economy Ministry has said.

In November 2014, factory orders for investment goods had dropped by 3.1 percent and for basic goods had reduced by 2.3 percent. Demand for consumer goods increased by 2.6 percent during the same period.

German inflation slowed down by 0.1 percent in the last month, also the weakest in about the past five years. Also, country’s unemployment rate dropped to a record-low 6.5 percent. Companies have also reduced their sales forecast citing project delays in the UK and an accelerated decline in European distribution.  

The European Central bank has decided to prepare a stimulus package that will likely include government-bond purchases.