German industrial orders rise more than expected in October

BERLIN: German industrial orders rose more than expected on the month in October, data showed on Friday, raising hopes the manufacturing sector in Europe's biggest economy started the fourth quarter on a solid footing during a second wave of the COVID-19 pandemic.

"Industry is doing well again," said Jens-Oliver Niklasch, senior economist at Landesbank Baden-Wuerttemberg. "The economic weakness resulting from the pandemic is more or less the result of the services sector. And this will not change soon."

The Federal Statistics Offices said orders for industrial goods rose by 2.9pc in seasonally adjusted terms, marking the sixth increase in a row and beating the Reuters consensus forecast for a 1.5pc rise. September's figure was revised up to an increase of 1.1pc.

"This is an early Christmas present," said Thomas Gitzel, chief economist at VP Bank. "As long as the services sector is suffering under restrictive measures, it is all the more important that industry provides a compensation effect."

Germany imposed a lockdown early last month to reverse the tide of a second wave of the coronavirus that saw both infections and deaths rise sharply.

Restrictive measures that include keeping restaurants, hotels, fitness studios and other leisure venues shut as well as limiting private gatherings to five people from two households will be extended until Jan. 10.

Figures from the Economy Ministry showed domestic orders rose 2.4pc on the month, while orders from abroad were 3.2pc higher. Contracts from the euro zone increased by 0.5pc.

A breakdown of the data showed that demand for both capital and intermediate goods had increased while demand for consumer goods had contracted.

Germany has unleashed an unprecedented rescue package for the economy that includes financial lifelines for businesses affected by lockdowns, incentives for firms to keep workers on the payroll and an extension until next June of measures to protect credit insurers from defaults.