German Industrial Orders Continue To Rise

BERLIN (AP) -- German industrial orders saw their second consecutive strong month-on-month rise in June, a 4.5 percent climb that was led by demand from other European countries, official figures indicated Thursday.

The increase followed a rise of 4.4 percent in May. It was the latest indicator of brighter times ahead for Germany's export-dependent economy, Europe's biggest, which went into a deep recession last year.

The June performance was far better than the increase of less than 1 percent that many economists had predicted.

Combined orders for May and June were up 6.8 percent compared with the previous two-month period.

The Economy Ministry said that, while industrial orders from inside Germany were up only 0.2 percent in June, orders from abroad rose by a cumulative 8.3 percent.

Demand from Germany's partners in the 16-nation euro zone rose sharply, the data showed, with orders up 13.2 percent. Orders from elsewhere in the world rose by 4.8 percent.

Thursday's data showed that consumer goods were a weak point in demand in June, with orders falling by 0.5 percent. Both German and foreign orders declined.

Recent surveys have shown rising business and consumer confidence, though unexpectedly poor June retail sales this week cast a cloud over the increasing optimism.

"The German manufacturing sector has undoubtedly arrived at the end of the unprecedented downturn in demand," said Alexander Koch, an economist at UniCredit in Munich.

Stimulus programs around the globe and decreasing risk aversion, among other factors, "bode rather well for a continuing strong rebound in industrial demand in the coming months," Koch wrote in a research note.

Following another small decline in gross domestic product for the spring, "the rebound in industrial demand should contribute strongly to GDP growth" in the third quarter, he added, revising his forecast upward to a 1 percent increase from 0.3 percent.

Preliminary second-quarter GDP figures are due next Thursday.

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