German factory orders rose in April

06-08-2010 13:44

German factory orders rose in April for the second month. This unexpected rise was the result of the weaker Eurozone currency, which stimulated exports and boosted investments. Factory orders, corrected for seasonal variation and inflation, jumped 2.8% in April. The previous month showed a 5.1% rise, according to the German Economy Ministry. Economists expected a 0.4% decline. In comparison to the same period in 2009, orders rose 29.6%.

Debt crisis

The debt crisis in the eurozone has affected its currency, which has dropped 20% versus the Greenback since November. The weaker Single Currency boosts exports to countries outside the 16-nation eurozone. It’s likely that budget tightening in several eurozone nations affects economic growth. German factories are increasing production in order to meet rising offshore orders and increasing investments in Germany.

German economy

Carsten Brzeski, an economist at ING Group in Brussels, commented: “Germany has a solid position with regard to the production of machines that boost the international economy. The weaker Euro really starts to impact markets. It is expected that the second quarter shows strong results. European budget cuts probably affect German firms in the third and/ or fourth quarter of 2010.”

German factory orders

Previously the Economy Ministry announced that orders in March rose by 5%. They have adjusted this percentage upwards. Domestic orders rose by 2.9% and exports sales gained 2.8% in April. Both increases were boosted by a 5.5% rise in orders from outside the 16-nation euro zone. German firms continue to create more jobs. This is the result of the demand from upcoming nations like China for goods like Siemens turbines and Daimler automobiles. The jobless rate dropped to 7.7% last month.

Mercedes-Benz

Mercedes-Benz, a division of Daimler AG, expects a considerable rise in second-quarter sales. This is the result of increased demand for the high-end E-Class sedan in April. Mercedes-Benz delivered 15% more cars and SUV’s, 93.100, in comparison to 2009.

German economy

Last winter has been the coldest in 14 years and has restrained construction activities. The latest figures implicate that the German economy recovered when building activities were resumed at the start of spring.
Germany’s central bank has predicted that the economy will expand by 1.6% in 2010. In 2009, the German economy shrank by 5%. The German GDP grew by 0.2% in the first quarter of 2010.