German Factory Orders Unexpectedly Drop Led by Investment Goods

(Bloomberg) -- German factory orders unexpectedly declined in September, reflecting a slowdown in growth over the summer months in Europe's largest economy.

Orders, adjusted for seasonal swings and inflation, fell 0.6 percent from August, when they rose a revised 0.9 percent, data from the Economy Ministry in Berlin showed on Monday. The median in a Bloomberg survey was for an increase of 0.2 percent. Orders gained 2.6 percent from a year earlier.

The report confirms the Bundesbank's view that the German economy underwent a soft patch in the third quarter, even as underlying momentum remained “quite strong.” Since then, manufacturing has gathered pace as companies boosted hiring, partially in response to stronger foreign demand from the U.S and Asia, while unemployment dropped to a fresh record low.

Orders for investment goods shrank 1.6 percent in September, while those for consumer goods rose 0.5 percent, the report showed.

Domestic demand slid 1.1 percent and export orders dropped 0.3 percent. Euro-area orders slumped 4.5 percent, after a 4.2 percent gain the previous month, and orders from outside the currency bloc climbed 2.5 percent.

--With assistance from Kristian Siedenburg Andre Tartar and Jeff Black To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net. To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Jana Randow