German factory orders have shown a surprise slump as sluggish demand in the crisis-stricken eurozone has had a far greater impact than expected by analysts. However, surveys show consumer confidence has picked up.
German industrial orders decreased considerably in the first month of 2013, the Federal Economics Ministry reported Thursday.
It said monthly factory orders contracted by 1.9 percent month-on-month after rising by 1.1 percent in the final month of 2012. The figures were in stark contrast to the expectations by analysts who had penciled in a 0.6-percent increase for January.
On a year-to-year-basis, January orders even declined by 2.5 percent, casting doubts over recent assumptions that the worst of the eurozone's protracted debt crisis was over.
Growing demand expected
"The drop in orders at the beginning of the new year indicates that industry has not yet overcome its phase of weakness," the ministry commented in its latest monthly report.
It noted that orders from the recession-hit euro area tumbled by 4.1 percent in January, leading to a 3-percent drop in total foreign orders, while domestic demand dipped by only 0.6 percent.
But recent consumer and business confidence surveys showed trust in economic growth had been picking up again in Germany after a 2012 final-quarter contraction not seen since the peak of the global financial crisis in 2009.
hg/hc (dpa, Reuters)