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You can find the current article at its original source at http://www.theguardian.com/business/live/2019/feb/06/german-recession-fears-factory-orders-brexit-stock-markets-business-live
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| German recession fears grow as factory orders tumble - business live | German recession fears grow as factory orders tumble - business live |
| (about 1 hour later) | |
| More bad news from Germany -- growth across its building sector almost fizzled out last month. | |
| Data firm Markit says its German construction PMI (which measures activity across the sector) fell to just 50.7, down from 53.3 in December. That’s worryingly close to stagnation (50.0). | |
| Markit says construction firms were hit by bad weather in January, which made it harder for builders to crack on. | |
| Commercial construction activity fell at the fastest rate in almost six years, while house-building increased at a much slower rate than in December. | |
| Phil Smith, Principal Economist at IHS Markit, says the PMI data shows slower growth across a number of key business metrics. Winter storms, snow and ice are probably the main culprits, he adds. | |
| The fact that growth in total industry activity slowed down more than new orders, which remained comparatively robust, suggests that it wasn’t necessarily a demand-driven slowdown and that severe bad weather probably did cause some disruption to actual work on the ground during the opening month of the year. | |
| European stock markets have opened in the red, after this morning’s woeful German factory orders. | |
| In Frankfurt, the DAX index of Germany’s top companies has lost 0.3%, with Daimler down almost 2% and Deutsche Bank down 1.5%. | |
| In London, the FTSE 100 has dropped by 18 points (0.3% to 7,158, away from last night’s three-month low. Online grocery firm Ocado is leading the fallers, down 5%, after a huge fire swept through its robotic warehouse in Hampshire. | |
| Ocado has just told shareholders that the damage is wore than first thought: | |
| Unfortunately the fire which started yesterday morning in a corner of the ambient grid was not contained as we believed, and last night expanded. | |
| Whilst we are informed by the Fire Brigade that it is now under control, during the night part of the roof collapsed and there has been substantial damage to the majority of the building and its contents. | |
| Today’s grim factory orders data come just hours after Deutsche Bank warned that Germany is probably heading for recession. | |
| In a new report, Deutsche economists wrote: | |
| “The start of the German economy into 2019 has been a major disappointment so far. | |
| “The development of several key cyclical indicators is telling us that the German economy is drifting towards recession right now.” | |
| They could point to a drop in German industrial output late last year, and a smaller-than-expected drop in unemployment in January. | |
| Deutsche Bank Says German Economy Is Drifting Toward Recession https://t.co/XVXggfXLrx | |
| German factory orders “took a nosedive” in December, says economist Carsten Brzeski of ING ruefully, adding: | German factory orders “took a nosedive” in December, says economist Carsten Brzeski of ING ruefully, adding: |
| The inventory build-up in recent months, as well as the recent drops in order books, suggest that any rebound of industrial activity in Germany will be slow and sluggish. | The inventory build-up in recent months, as well as the recent drops in order books, suggest that any rebound of industrial activity in Germany will be slow and sluggish. |
| Germany’s economy ministry doesn’t see much cheer in today’s factory orders, saying: | Germany’s economy ministry doesn’t see much cheer in today’s factory orders, saying: |
| “The decline in orders in December suggests that the weak phase in industry will continue for now. | “The decline in orders in December suggests that the weak phase in industry will continue for now. |
| The latest sentiment indicators also point to muted momentum at the start of the year.” | The latest sentiment indicators also point to muted momentum at the start of the year.” |
| The decline in German factory orders was mainly due to weaker demand for abroad. | The decline in German factory orders was mainly due to weaker demand for abroad. |
| Orders from outside the eurozone plunged by 5.5% month-on-month in December, while domestic orders dipped by 0.6%. | Orders from outside the eurozone plunged by 5.5% month-on-month in December, while domestic orders dipped by 0.6%. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Concerns over the health of the German economy are mounting this morning, after Europe’s largest economy suffered another big fall in manufacturing orders. | Concerns over the health of the German economy are mounting this morning, after Europe’s largest economy suffered another big fall in manufacturing orders. |
| Germany factory orders plunged by 1.6% in December, new figures released this morning show, due to weak demand from overseas. | Germany factory orders plunged by 1.6% in December, new figures released this morning show, due to weak demand from overseas. |
| That’s much worse than the 0.3% rise which economists had expected, and follows a 0.2% decline in November. | That’s much worse than the 0.3% rise which economists had expected, and follows a 0.2% decline in November. |
| On an annual basis, orders were a chunky 7% lower than in December 2017. That looks to be the biggest drop since 2012. | On an annual basis, orders were a chunky 7% lower than in December 2017. That looks to be the biggest drop since 2012. |
| 🇩🇪 #Germany Dec #Manufacturing Orders:*M/M: -1.6% v 0.3%e (largest ⬇ since June 2018)*Y/Y: -7.0% v -6.7%e (largest ⬇ since June 2012) pic.twitter.com/PRZVSnoPXS | 🇩🇪 #Germany Dec #Manufacturing Orders:*M/M: -1.6% v 0.3%e (largest ⬇ since June 2018)*Y/Y: -7.0% v -6.7%e (largest ⬇ since June 2012) pic.twitter.com/PRZVSnoPXS |
| Such a weak result shows that Germany’s industrial base is struggling in the face of trade tensions, slowing global growth, and Brexit anxiety. | Such a weak result shows that Germany’s industrial base is struggling in the face of trade tensions, slowing global growth, and Brexit anxiety. |
| Germany’s car industry has also had a bad few months. They’ve struggled to get models tested and onto the road following the introduction of new, tougher, pollution rules. | Germany’s car industry has also had a bad few months. They’ve struggled to get models tested and onto the road following the introduction of new, tougher, pollution rules. |
| We already know that German GDP shrank by 0.2% in July to September; some economists fear its economy may have kept shrinking, putting the country into recession. | We already know that German GDP shrank by 0.2% in July to September; some economists fear its economy may have kept shrinking, putting the country into recession. |
| The Recession word is getting louder. #Germany's Industrial Order dropped 1.6% in Dec m/m vs a gain of +0.3% expected. Capital goods orders fall 2.5% m/m. pic.twitter.com/J4cA5gmyNQ | The Recession word is getting louder. #Germany's Industrial Order dropped 1.6% in Dec m/m vs a gain of +0.3% expected. Capital goods orders fall 2.5% m/m. pic.twitter.com/J4cA5gmyNQ |
| More reaction to follow.... | More reaction to follow.... |
| Also coming up today | Also coming up today |
| European stock markets are tipped to open flat, after a strong rally on Tuesday that saw the FTSE 100 jump by 2% to a new three-month high. | European stock markets are tipped to open flat, after a strong rally on Tuesday that saw the FTSE 100 jump by 2% to a new three-month high. |
| Britain’s Competitions and Markets Authority is enforcing a clampdown on some of the biggest online hotel booking sites - calling it “a victory for UK holidaymakers”. More on that shortly. | Britain’s Competitions and Markets Authority is enforcing a clampdown on some of the biggest online hotel booking sites - calling it “a victory for UK holidaymakers”. More on that shortly. |
| Struggling outsourcing group Interserve has announced a whopping debt-for-equity swap rescue deal. | Struggling outsourcing group Interserve has announced a whopping debt-for-equity swap rescue deal. |
| Interserve has announced an epic debt-for-equity swap which saves the company but massively dilutes existing shareholders:“the shares issued through the Placing and Open Offer will account for 97.5% of the ordinary share capital of Interserve”https://t.co/kxdbJbPzSX | Interserve has announced an epic debt-for-equity swap which saves the company but massively dilutes existing shareholders:“the shares issued through the Placing and Open Offer will account for 97.5% of the ordinary share capital of Interserve”https://t.co/kxdbJbPzSX |
| Cabinet Office voices concern over Interserve rescue deal | Cabinet Office voices concern over Interserve rescue deal |
| Plus we should get new US trade figures, and the weekly oil inventory stats, which should give another insight into the state of America’s economy | Plus we should get new US trade figures, and the weekly oil inventory stats, which should give another insight into the state of America’s economy |
| The agenda | The agenda |
| 1.30pm GMT: US trade figure for November | 1.30pm GMT: US trade figure for November |
| 3.30pm GMT: US weekly oil inventory figures | 3.30pm GMT: US weekly oil inventory figures |