Economic data shows EU’s largest economy to be chugging along fine, with the manufacturing sector producing healthy growth.
In a significant development that bodes well for Germany and the European Union, industrial orders in Germany have risen twice as much as expected. The surge in domestic demand has offset weak foreign appetite which goes to suggest that Europe’s biggest economy will gain further traction in coming months.
German factories have posted a 1% increase in contracts in June. This follows a 1.1% increase in German manufactured goods in May.
“The order numbers are another mosaic tile in what is a very positive picture of the economy,” said Nordea Holger Sandte.
A breakdown of the June data shows an increase in domestic demand by 5.1%. Foreign orders however have dropped by 2%. Orders from within the Eurozone have also declined by 2.4%.
Sandte however said, in general terms, foreign orders are outpacing domestic demand. Friday’s data however seems to contrast this statement.
“The stronger euro isn’t likely to hamper this development much so the traffic lights for the economy are still glowing green,” said Sandte.
This data underscores a flurry of upbeat figures that have underlined the strength of the German economy seven weeks before a national election in which Chancellor Angela Merkel is seeking a fourth term.
The data also shows a fall in unemployment levels and an increase in engineering orders. The robust growth of the manufacturing sector has boosted consumer morale, despite a slight slowing in the private sector.
German Chancellor Angela Merkel conservative party, which has presided over a period of economic prosperity for twelve long years, have made the country’s economic health a pillar of their campaign, and has promised “a strong economy and secure jobs”.
Germany’s Economy Ministry said order levels, combined with an excellent business climate, pointed to a continued slight upturn in industrial activity.