2nd UPDATE: German Sep Mfg Orders Adj +0.9% MM

(Adds analyst comment)

 
   By Patrick McGroarty 
   Of DOW JONES NEWSWIRES 
 

BERLIN (Dow Jones)--German manufacturing orders rose in September compared with August on strong foreign demand, the Economics Ministry said Friday.

The rise marks the seventh consecutive increase in monthly orders, the ministry said.

Orders in September rose a seasonally adjusted 0.9% on the month, a slightly weaker performance than the 1.0% rise that analysts polled by Dow Jones Newswires had forecast.

In August, orders rose a revised 2.1%, compared with the previously reported 1.4% rise.

The increase in September was buoyed by a 3.7% rise in foreign orders, evidence that global economic conditions are improving, though that rate was lower than a 5% increase in August.

"This is primarily a classic upswing, largely driven by exports," said Andreas Rees, a UniCredit analyst. "The impulses from abroad are obviously getting broader-based across countries and regions," he added.

Orders from the other 15 countries sharing the euro jumped 6.0%, and orders from beyond the euro zone climbed 2.2% in September from the month earlier, according to the ministry.

But signs of weakness in the German economy were apparent as domestic orders fell 2.3% on the month after a 0.8% drop in August. The ministry said the drop was due "not least" to a corrective 10% decrease in auto and auto parts production after gains in the spring and summer.

The ministry said the end in September of a car-buying incentive scheme, which boosted car purchases earlier in the year, was partly to blame. "The pace of recovery during these recent developments decreased somewhat," the ministry added.

Orders for consumer goods showed the biggest rise overall, up by a strong 7.5% on the month.

Despite the droop for car and car part makers, demand for investment goods rose 1.3%, helped in part by an 8.3% increase for machine makers. Producer goods orders showed the weakest performance, falling for the first time since February, by 1.1%.

On the year, orders dropped 13.1% in September, following an annual drop of 19.8% in August.

The two-month comparison, which irons out some fluctuations in the data, shows that manufacturing orders rose 4.0% in the August-September period compared with the June-July period.

The stronger order data, particularly from abroad, mean German industrial output should continue to rebound in the fourth quarter, the ministry said.

BNP Paribas analyst Dominic Bryant agreed, but predicted that the rate is likely to continue decreasing.

"While the next few months are likely to show strength in output, the pace of increase in orders is beginning to wane," Bryant said.

Web site: www.bmwi.de

-By Patrick McGroarty, Dow Jones Newswires; +49-30-2888-4128; patrick.mcgroarty@dowjones.com

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(END) Dow Jones Newswires

November 06, 2009 08:15 ET (13:15 GMT)


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