German factory orders surprised again on the downside in January. On a monthly basis, factory orders plunged by 8.0% M/M, while a much softer decline was expected (-2.0% M/M). The December figure was downwardly revised from -6.9% M/M to -7.6% M/M. Looking at the details, weakness was broadly based with a 9.1% M/M decline in capital goods, but also orders for consumer- (-6.7% M/M) and intermediate goods (-6.8% M/M) were extremely weak. On a yearly basis, factory orders are down by a stunning 37.9% Y/Y. This outcome raises expectations GDP will shrink further in the first quarter of 2009, maybe at the same disastrous fast pace as in Q4 2008.
Other: UK trade deficit widens due to non-EU demand
In the UK, the trade deficit widened to £3585 in January, while the December figure was upwardly revised from -£3611 to -£3248. Looking at the details, exports dropped by 5% M/M, while imports fell by 1% M/M in January. Especially exports to non- European Union countries fell sharply. In the coming months, both imports and exports are forecasted to remain weak.
