Germany's factory orders dropped for the second straight month in January, reflecting the weakness in domestic demand.
Factory orders slid 0.1 percent month-on-month following a revised 0.2 percent drop in December, data from Destatis showed Monday. This was the second consecutive fall in orders.
Nonetheless, the pace of decline was slower than an expected 0.4 percent drop. The monthly decline for December was initially estimated to be 0.7 percent.
In January, domestic orders fell 1.6 percent, while foreign orders grew 1 percent. New orders from the euro area advanced 7.5 percent on the previous month, while orders from other countries decreased 2.7 percent.
Manufacturers of intermediate goods slid 4 percent, while the manufacturers of capital goods showed 1.7 percent increase on the previous month. At the same time, orders for consumer goods gained 3.9 percent.
On a yearly basis, factory orders advanced 1.1 percent, reversing December's 2.2 percent decrease. Economists had forecast orders to remain flat in January.
The burden on manufacturing from the crisis in emerging markets has been limited so far, Ralph Solveen at Commerzbank, said. But the analyst assumed this will change in the coming months, with production likely to stagnate medium-term.
According to the latest Purchasing Mangers' survey, the German manufacturing sector expanded at the slowest pace in 15 months in February. Subdued demand from the domestic and foreign markets was one of the reasons behind the manufacturing slowdown.
The European Central Bank's rate-setting body, the Governing Council, is scheduled to hold its next policy session on March 10. Markets and economists are looking forward to a further reduction of at least 10 basis points in the deposit rate, which will push it deeper into negative territory.
The material has been provided by InstaForex Company - www.instaforex.com
