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German factory orders fall for first time in 4 months

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German factory orders fall
Germany   Orders were forecast to drop 0.2%

Germany's factory orders declined for the first time in four months in November as both domestic and foreign demand deteriorated.

Factory orders decreased by a larger-than-expected 0.4% month-on-month, reversing a revised 0.7% rise in October, data from Destatis revealed.

Orders were forecast to drop 0.2% and this was the first decrease in orders since July.

Excluding major orders in manufacturing, new orders grew 1.8% from the previous month.

Domestic and foreign orders fell 0.4% and 0.5%, respectively. New orders from the euro area climbed 0.7%, while that from other countries decreased 1.2%.

Orders for intermediate goods climbed 2% and demand for consumer goods gained 3.2%. Meanwhile, demand for capital goods showed a decline of 2.3%.

In November, fluctuations in major orders were the main reason for the negative result, the economy ministry said.

Overall orders in the second half of 2017 developed extremely dynamically. This lays the foundation for a strong start to the year in industry, the ministry noted.

On a yearly basis, industrial orders expanded 8.7% in November, faster than the 8.4% increase economists had forecast.

Data showed that manufacturing turnover increased 4.6% on a monthly basis in November, in contrast to a 2.1% decrease in October.

In fact, the decrease in orders came after three consecutive increases and is rather of a technical nature than any sign of weakness, Carsten Brzeski, an ING economist, said.

With inventories low and capacity utilization at its highest level since 2008, there is little reason to get concerned, the economist noted. The general trend for industrial production in Germany remains positive.

Destatis is slated to publish industrial output figures on January 9. Economists forecast production to grow 1.8% in November.

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