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Industry

Germany's key engineering sector suffers setback

Germany's machine tools sector has experienced a slump in orders, particularly from emerging economies, while domestic demand also took a dive. The industry said it might have problems with full plant utilization.

Overall incoming orders for the German machine tool sector were down by 4 percent in February, compared with the same month a year earlier, the VDMA industry association reported Tuesday.

It said both domestic and export demand had dropped markedly in an industry crucial for the country's overall economic performance.

Export orders were reported to have dipped by 3 percent, with domestic demand down by 6 percent.

Strong euro a headache

German trade surplus narrows

VDMA Chief Economist Ralph Wiechers said "the orders situation left much to be desired," mentioning that only a gratifying increase in orders from fellow eurozone nations had prevented the figures from being a lot worse in February.

Wiechers indicated that a solid rebound was required soon to ensure full plant utilization, with roughly a million employees working in the sector across the nation.

VDMA argued that the euro's recent appreciation had contributed to the slump, making German exports more expensive in regions outside the 18-member single-currency bloc.

hg/rc (AFP, dpa)

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