Germany’s industrial sector increasingly hit by eurozone weakness - ABN AMRO

Commenting on today's factory orders data from Germany, "Orders received by Germany’s industrial companies dropped by 2.7% mom in July, following a rise by the same magnitude in the month before," said ABN AMRO senior economist Aline Schuiling.

Key quotes

"The monthly drop in orders was broad-based and spread amongst all three main goods categories (intermediate goods, capital goods and consumer goods). The regional breakdown shows that the weakness was concentrated in foreign orders, (-4.2%), but that domestic orders fell somewhat as well (-0.5%)."

"The monthly orders data are very volatile and the three-month growth rate gives a better view of the strengths and weaknesses in the series. Indeed, when looking at 3m-o-3m growth, it turns out that the weakness in orders has shifted from foreign orders towards domestic orders since the first quarter of this year."

"Moreover, within total foreign orders, the weakness has shifted from orders received from countries outside the eurozone towards orders received from within the eurozone. In other words, the orders data signal that, compared to the first few months of this year, Germany’s industrial sector is hurt increasingly hard by domestic weakness and weakness in other eurozone countries rather than by weakness outside the eurozone."