FX.co ★ German Plant & Machinery Orders Decline 10% In January: VDMA

Germany's mechanical engineering industry body, VDMA, reported on Monday that orders for plant and machinery from German manufacturers continued to decline in January compared to the previous year. The demand in the sector recorded a 10.0 percent decrease at the beginning of the year.

While domestic orders experienced an 11.0 percent year-on-year fall, foreign demand reduced by 9.0 percent. The VDMA chief economist Ralph Wiechers informed that there is still a lack of favorable effects on investment behavior. He maintained optimism by stating, "Only for parts of the foreign business does the hope of bottoming out remain intact."

The demand for goods from nations in the euro area saw a decline of 19.0 percent, and orders from countries outside the euro area slipped by 5.0 percent. Wiechers pointed out that the global economic recovery is still a long way off, predicting growth forecasts for Germany have even been rescinded. Furthermore, geopolitical challenges and uncertainties continue to pose a threat.

Comparing the November-January period to that of a year ago provides similar results. Orders once again declined by 10.0 percent in real terms. This included a slump of 13.0 percent in domestic demand and an 8.0 percent decrease in orders from foreign markets.