German industrial orders slump 4.2 percent in February

German factory orders suffer biggest fall in two years – business live

German factory orders suffer biggest fall in two years – business live

It comes after a string of weak data releases in recent months pointed to an economic downturn in Germany.

The state was released by joint project group "Gemeinschaftsdiagnose": German Institute for Economic Research (DIW Berlin), Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, ifo Institute - Leibniz Institute for Economic Research at the University of Munich in cooperation with the KOF Swiss Economic Institute at ETH Zurich, Kiel Institute for the World Economy (IfW), RWI - Leibniz Institute for Economic Research in cooperation with the Institute for Advanced Studies Vienna.

Defence Minister Ursula von der Leyen said last month the ministry would have to fight next year to ensure that defence spending continues to expand as a share of the overall economy to move towards the North Atlantic Treaty Organisation target of 2 per cent of economic output.

On an annual basis, factory orders were a painful 8.4% lower, suggesting that Germany's industrial heartland has weakened over the past year.

Germany would be especially hard hit by an escalation of trade disputes and a disorderly Brexit as the U.S. and Britain are two of its most important trading partners, the institutes said. The deadline has since been extended to April 12. In January, the government forecast growth of 1.0 percent this year.

Officials are hopeful that once global trade disputes and Brexit are resolved, growth can pick up next year.

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According to the Economy Ministry, contracts for German goods slumped by 4.2 percent.

ING economist Carsten Brzeski said it had seemed that a trend of decreasing orders had ended at the end of 2018, but the "sharp drop in new orders clearly undermines latest tentative signs of a rebound in global activity in the first quarter". -China trade talks and a softer Brexit.

Data showed that foreign orders were down 6.0 per cent in February, with a 7.9 per cent drop from non-euro zone countries and a 2.9 per cent decrease within the euro zone.

The sharp revision has seen the growth forecast for Europe's biggest economy downgraded to 0.8 percent from a previous estimate of 1.9 percent.

Germany's 10-year Bund yield was minus 0.008 per cent. It jumped five basis points the day before in its biggest one-day rise since mid-January, Reuters reported. "Some of that angst has been lifted over the course of the past few days by a slew of positive headlines leaving the 10-year Bund yield around zero again".

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