(MENAFN- Arab Times) FRANKFURT Dec 5 (AFP): German industrial orders a key measure of demand for German-made goods both at home and abroad rose strongly in October suggesting Germany's period of economic weakness could be over data showed Friday.
Industrial orders rose by 2.5 percent in October compared with the previous month the economy ministry said in a statement. In September German factory orders had already risen by 1.1 percent. 'This was a good start to the fourth quarter. Alongside a brightening of sentiment indicators the signals are looking increasingly positive' the ministry said. 'Even if the economic risks continue to exist this suggests that the German economy could be gradually beginning to recover from its period of weakness.' By sector orders for semi-finished goods climbed by 2.5 percent and orders for capital goods rose by 3.0 percent while orders for consumer goods slipped by 0.1 percent. Other recent German data including key sentiment indicators such as the Ifo business climate index have also surprised to the upside. And while the German central bank or Bundesbank slashed its growth forecasts for 2014 2015 and 2016 on Friday it too said the economy remains in 'remarkably good shape.' 'Whether the German economy can grow more dynamically over the course of 2015 primarily depends on the international setting' the Bundesbank said in its half-yearly projections. 'If the economic recovery in the euro area picks up as expected and world trade gains renewed momentum additional expansion will be possible.' German enterprises were predominantly well positioned with low debt and balanced price-cost ratios and 'should be able to take advantage of the opportunities that may arise' the central bank wrote. 'Given the extremely favourable funding conditions this is likely to extend to investment as well. The domestic economy too is in good shape.' Analysts also took heart from the apparent turnaround in factory orders and other data. 'Overall it suggests that the German economy has stabilised following the weakness seen in the summer' said BayernLB economist Stefan Kipar. 'The signs are favourable that negative growth GDP rates will be successfully avoided in the winter. The lower euro will provide support' Kipar said. German gross domestic product (GDP) contracted by 0.1 percent in the second quarter but returned to growth again in the third quarter meaning Europe's biggest economy escaped a new recession. Commerzbank economist Marco Wagner said the latest factory orders data 'suggest that the manufacturing sector has turned around and that production will tend to rise again in the coming months. 'For this reason it is likely that the overall economy will also expand somewhat more rapidly than in third quarter' he said. UniCredit economist Andreas Rees was more cautious. 'It is too early to push the all-clear button for take-off in the industrial sector. However looking at the details of today's data signals a promising start into the fourth quarter' he said. Bundesbank president Weidmann said falling oil prices should help the economy overall by providing relief to households and companies. 'If the low crude oil prices were to endure projected inflation for 2015 would need to be lowered by 0.4 percentage point. 'The repercussions for the real economy are more difficult to quantify.' However economic growth could consequently be 0.1 to 0.2 percentage point higher in the two coming years' Weidmann said.
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