* New orders fall by 6.4 pct in Sept, deepest fall since Dec
* Euro zone's top four economies all post deep falls in
* Data much worse than forecast; Reuters poll predicted a
2.5 pct fall
By Robin Emmott
BRUSSELS, Nov 23 Euro zone industrial new
orders slumped in September, the EU said on Wednesday, the
deepest fall since December 2008 and far worse than economists
had forecast, in the latest sign that Europe may be heading for
Orders in the 17 countries sharing the euro tumbled 6.4
percent in the month compared to August, well below expectations
of a 2.5 percent fall, with Germany and France registering sharp
contractions, the EU's Statistics Office Eurostat said.
"The scale of the deterioration is surprising," said
Clemente de Lucia, an economist at BNP Paribas. "We are entering
some kind of contraction in the last quarter of this year that
will continue in the first quarter of next year," he said.
Orders of capital goods, a measure of investment in new
machinery, fell the most in September compared to the previous
month, sliding 6.8 percent and suggesting factory managers and
companies made a clear call to pull back expansion plans.
On an annual basis, industrial new orders in the euro zone
rose 1.6 percent in September, while economists polled by
Reuters expected an 8.0 percent increase.
As the epicentre of the sovereign debt crisis has moved to
Rome from Athens, some economists are predicting a deeper and
longer recession than first seen. ABN Amro recently cut its euro
zone gross domestic product forecast for 2012 to a contraction
of 0.8 percent, from growth of 0.4 percent.
Italy's bond yields have soared to levels seen as
unsustainable and the euro zone may not have the means to rescue
Rome if it shut out of capital markets. Worries about Italy have
spread to France, which has a deficit running at nearly 6
percent of GDP, and French yields have ballooned.
Germany witnessed one of its worst bond sales since the
launch of the euro on Wednesday, adding to concerns that the
debt crisis may now threaten Berlin.
"It is now very clear that this debt crisis has also
affected the real economy and the real economy is now going
down, for sure," said Peter Vanden Houte at ING, pointing to the
0.7-point fall in the purchasing managers' index for
manufacturing in November, also released on Wednesday.
VOLATILE, BUT STILL BAD
Even though industrial orders are considered volatile by
economists, their weakness in September was hard to deny.
All sectors in the Eurostat index saw declines in September
and the fall in orders was sharp in Italy, where they tumbled
9.2 percent. In Spain, they slid 5.3 percent.
In Germany, the euro zone's exporting powerhouse, new orders
fell 4.4 percent. That signals European manufacturing, which had
powered a two-year recovery since the end of the global
financial crisis in 2009, has now stalled, economists say.
Euro zone GDP did grow slightly in the third quarter, but
the September new orders data erased the 1.4 percent increase in
orders in August. The new orders figures were also compounded by
the euro zone purchasing managers' survey in November, which
suggest a 0.5-0.6 percent GDP contraction in the fourth quarter.
Falling export demand from Asia, fewer new orders,
unemployment at 10 percent and the ever weaker confidence are
combining to create a very difficult business environment.
Adding to that, euro zone consumer confidence, released on
Tuesday, also fell sharply in November.
"Confidence in the business sector in the euro area has
reached levels not seen since the great recession of 2008 and
2009," said Olivier Bizimana at Morgan Stanley.