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German orders unexpectedly plunge in October

Published 12/05/2008, 06:09 AM
Updated 12/05/2008, 06:15 AM

BERLIN, Dec 5 (Reuters) - German manufacturing orders dropped by 6.1 percent in October, one of their biggest ever monthly falls, just one month after a record decline in September, preliminary Economy Ministry data showed on Friday.

The seasonally adjusted monthly drop compared with the consensus forecast of a Reuters poll for a rise of 0.4 percent.

Domestic orders fell by 6.1 percent, with foreign orders down 6.2 percent, led by a drop in demand from the euro area.

"Industrial production will decline further in coming months due to the persistent weakness in orders," the ministry said.

Orders for capital goods in Europe's biggest economy fell by 8.2 percent, with those for intermediate goods down 4.5 percent. Consumer goods orders fell by 1.6 percent.

The German economy is already in recession and fears are mounting the country could be facing its biggest economic slump next year since World War Two.

Deutsche Bank chief economist Norbert Walter told a newspaper on Friday German gross domestic product (GDP) could contract by up to 4 percent in 2009.

This would be four times as bad as its previous worst one-year performance since West Germany's founding in 1949.

(Writing by Dave Graham)

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