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German industrial orders plunge

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18:02 CET+01:00
German industrial orders plunged by 25.1 percent in 2008 as the global economic slowdown hit demand in Europe, data released on Thursday by the Economy Ministry showed.

In December, orders taken in by the biggest European economy fell for the fourth month running, and by twice as much as expected, the data showed. "The drop in orders continues at an unchanged pace," the ministry said in a statement. "The prospects for industrial production in the coming months is extremely subdued."

The sharp drop was mainly the result of a drop in demand from other eurozone countries and for investment goods, or products used to make other goods.

Orders from abroad fell by nearly 28 percent over the year and domestic orders by nearly 20 percent. On a monthly basis, industrial orders plummeted by 6.9 percent in December, while analysts polled by Dow Jones Newswires had predicted a drop of 3.0

percent.

Industrial orders have been falling since December 2007, though they posted a rise in August.

Germany is in a recession that began in the second quarter of 2008 and is expected to last well into this year.

Dow Jones quoted a ministry spokeswoman as saying that the rate of decline in the past four months "was the strongest since Germany's reunification" in 1990."

In December, foreign orders fell by 9.4 percent and domestic orders were off by 4.3 percent, the ministry said. But orders from other eurozone countries plunged by 15.2 percent.

"There is no denying that the nasty recession will continue in the coming months," said Andreas Rees of UniCredit Research, in a statement, citing the industrial data.

"The risks are rising that overall economic activity at the beginning of this year will even shrink more heavily than in the fourth quarter of 2008," he added.

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