Euro zone sees drop in industrial orders
Brussels, September 23, 2011
Euro zone industrial orders fell by more than expected in July and consumer morale worsened to a two-year low in September, adding to concerns that Europe may be sliding towards recession.
New orders in the 17 countries using the euro fell 2.1 per cent compared with June, the European Union's statistics office Eurostat said yesterday, deeper than the 1.1pc forecast by a poll of economists.
The data came as surveys showed the euro zone's private sector contracted in September for the first time in two years as fallout from Europe's debt crisis sucks away business confidence.
"We are heading towards a slowdown in growth in the second half, especially if you combine this data with the PMIs," ING economist Carsten Brzeski said, referring to the Flash Markit Eurozone Services Purchasing Managers' Index.
"It shows that demand for euro zone products is weakening and we are on the brink of a recession," he said.
Industrial orders rose 8.4 per cent in July versus a year ago, but again disappointed economists who expected a 10.6 per cent increase.
French industry fell back in July and orders tumbled 11.2 per cent compared with June, the largest in the single currency bloc, while in Germany, Europe's top economy and manufacturing heartland, orders slid 3 per cent from June.
"The situation is deteriorating and we will see an industrial recession by the end of the year," said Unicredit's chief euro zone economist Marco Valli.