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German Industrial Orders Show Weak Growth

Industrial orders were up 0.2 percent on the month in November, the German Economy Ministry said, well below the 1.5 percent increase economists had expected.

BERLIN (AP) -- German industrial orders returned to weak growth in November as increasing domestic demand in Europe's biggest economy balanced out a dip in foreign orders, official data showed Thursday.

Still, the improvement was below expectations -- and new figures also showed a larger-than-expected decline in retail sales in November, underlining the risk to spending in Germany as unemployment increases.

Industrial orders were up 0.2 percent on the month in November, the Economy Ministry said. That followed a 1.9 percent decline in October, which was the first drop in eight months.

Domestic orders were up 1.4 percent in November, while foreign orders fell by 1 percent -- a decline caused by a 3.2 percent drop in business from outside the eurozone. Eurozone orders were up 2 percent.

"The recovery process has lost dynamism at present," an Economy Ministry statement said.

It said that a downward trend in car orders both at home and abroad was a major factor -- although the general trend in manufacturing still appears to be upward. Orders in the auto sector were down for the third straight month.

A German government car-scrapping bonus plan expired in September after giving sales of new cars a boost for much of 2009. Other countries had similar "cash-for-clunkers" schemes.

Economists had expected a 1.5 percent rise in industrial orders for November. But the slowing growth "does not mean an abrupt end of the recovery in manufacturing," said Alexander Koch, an economist at UniCredit in Munich.

"Further respectable improvements in (foreign) demand can be expected in the coming months," he said.

Germany went into recession in 2008 as demand for its exports dried up amid the global economic crisis, but the economy returned to modest growth in last year's second quarter.

However, gross domestic product is still believed to have declined by about 5 percent in 2009, and unemployment is expected keep rising this year. Official GDP figures are due next week.

On Thursday, the Federal Statistical Office said that retail sales in November -- excluding car sales -- were down 1.1 percent on the month in seasonally adjusted terms. That was worse than economists' prediction of a 0.3 percent drop.

Sales were down 2.8 percent on the year in November.

The statistical office said sales were down 1.8 percent on the year in last year's first 11 months. Based on that, it estimated that the decline for the full year would come in between 1.9 and 2.1 percent.

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