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German manufacturing crisis drags into final quarter

Credit: REUTERS/LEON KUEGELER

German industrial orders fell unexpectedly in October as demand at home and from outside the euro zone weakened, suggesting a manufacturing downturn will continue to hold back growth in Europe's largest economy in the final quarter.

Adds economy ministry, data details

BERLIN, Dec 5 (Reuters) - German industrial orders fell unexpectedly in October as demand at home and from outside the euro zone weakened, suggesting a manufacturing downturn will continue to hold back growth in Europe's largest economy in the final quarter.

Contracts for German-made goods were down 0.4% from the previous month, the Statistics Office said on Thursday. That undershot a Reuters consensus forecast for a 0.3% rise.

The reading for September was revised up to an increase of 1.5% from a previously reported 1.3%.

The economy ministry said that industrial orders had stabilised in recent months, with business expectations also developing a bit more favourably.

"However, activity in the manufacturing industry is still weak. The manufacturing outlook for the final quarter therefore remains subdued," it said.

Industrial orders from domestic clients fell 3.2% while demand from customers outside the euro zone dropped 4.1%, the data showed. Orders from other euro zone countries jumped 11.1%, helped by bulk orders.

Without bulk orders, overall industrial orders fell 1.4% in October.

The German economy skirted a recession in the third quarter as consumers, exports and state spending drove a 0.1% expansion from July through September, following a 0.2% contraction in the previous three months.

The country's export-dependent manufacturers are struggling with weaker foreign demand, tariff disputes sparked by U.S. President Donald Trump's 'America First' policy and business uncertainty linked to Britain's delayed departure from the European Union.

(Reporting by Michael Nienaber, editing by Tassilo Hummel and John Stonestreet)

((michael.nienaber@thomsonreuters.com; +49 30 2888 5085; Reuters Messaging: michael.nienaber.reuters.com@reuters.net www.twitter.com/REUTERS_DE www.reuters.de))

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