Germany’s Optimistic Outlook due to Higher Industrial Orders

The industrial orders in Germany surged surprisingly in October because of domestic and foreign demand from non-euro zone according to the reports on Wednesday. This implies that the country will have a good momentum in the next few months.

Orders of products that are locally made increased for three consecutive months and supported by the data up by 0.5 percent in October compared last month, according to the Economy Ministry. Despite the fact that bulk orders are lower than average for the month of November.

It is anticipated for the data to decline by 0.3 percent following an upward revision of 1.2 percent in bookings for the month of September based on the survey from Reuters.

An economist described the situation to be in a good condition, given that the economy has been robust the past few months while there is a “moderate growth” in October as a good result. Although, he said that growth would not move higher amid higher books of orders and more capacity to utilize.

The German economy has gained momentum by the third quarter and has been expanding since 2010 but there are still concerns since Germany doesn’t have a new government over two months following a national election.

Conservatives representative, Chancellor Angela Merkel, lost against the far-right in the September poll.  It is presumed that Social Democrats (SPD) will hopefully approve to run again the current ‘grand coalition’ after a failed attempt of alliance with the environmentalist Greens and pro-business Free Democrats.

Nevertheless, the Economy Ministry said that there is high demand for it along with record-high business confidence and positive growth in the manufacturing sector.

The orders data increased by 0.5 percent while there is 1.6 surge in contracts beyond the eurozone as it counterbalances the 1.2 drop in the bloc. Domestic contracts rallied by 0.4 percent.

Interest for both capital and consumer goods surged in October despite the demand for intermediate goods declined a bit. Comparably, there is less volatility in the past two months where it declined by 3.4 percent which is much higher than the level two months ago.