video Finance Videos

German industry gathers steam with rise in orders

Friday, August 04, 2017 - 01:40

German industrial orders rose twice as much as expected in June as a surge in domestic demand offset weaker foreign appetite, suggesting this sector of Europe's largest economy will gain traction in the coming months. Ciara Lee reports.

▲ Hide Transcript

▶ View Transcript

The flurry of good data continues for Germany. This time, industrial orders rising twice as much as expected in June. The surge in domestic demand offsetting any weaker foreign appetite and indicating the sector will gain traction in the coming months. Factories posted a 1 percent increase in contracts in June after orders for German-made goods rose by 1.1 percent in May. (SOUNDBITE) (English) RABOBANK, SENIOR CURRENCY STRATEGIST, JANE FOLEY, SAYING: "I think for most people in many countries the Made in Germany brand has been really very strong for decades, for really a very long period of time. I think we can look particularly at cars. I think we can look at other types of machinery goods and coming from Germany it automatically assumes a very strong brand. A breakdown of the June data revealed domestic demand increased by over 5 percent while foreign orders dropped by 2 percent. And with the country's auto industry back in the headlines, there could be a bumpy road ahead. (SOUNDBITE) (English) RABOBANK, SENIOR CURRENCY STRATEGIST, JANE FOLEY, SAYING: "German industry of course has been associated with diesel engines and of course we do see attention turning towards the future being in electric cars. And of course that has accelerated with the diesel gate scandals as well, so that part of the brand is perhaps being clouded by the whole of the diesel gate scandal." Upbeat data has been showcasing the strength of the economy in recent weeks. The number of Germans out of work is falling, the manufacturing sector is growing and consumer morale rising. That's good news for Chancellor Angela Merkel. She's just seven week away from a national election, and her conservative party have made economic health a pillar of their campaign.