Dec preliminary: +1.9% m/m, -1.7% y/y

MNI median forecast: +0.5% m/m, -2.9% y/y
MNI survey range: -0.6% to +1.7% m/m

Nov revision: -1.1% m/m (-1.3%)
Oct revision: +1.6% m/m (+1.5%)
Sep revision: -7.9% m/m (-7.8%)
August: +1.7% m/m (unrevised)
July: -1.9% m/m (unrevised)
—

PARIS (MNI) – Eurozone industry orders bounced back more than
expected in December on the back of a rebound for capital goods,
Eurostat said Wednesday.

Taking account of upward revisions for the previous two months, the
1.9% rise in December still left orders 1.7% lower on the year and more
than 12% below pre-crisis peaks. Orders in 4Q were 3.4% below the 3Q
average, which itself was down 2.9% from 2Q.

As in November, December’s results were skewed lower by declining
orders for heavy transport equipment, which tend to be very volatile
with a limited immediate impact on production. Excluding this category,
orders bounced back 2.5% in December but declined 3.7% in 4Q.

Despite the drop in heavy transport demand, capital goods orders
jumped 4.2% in December, extending the volatility of past months. Orders
for intermediate goods recovered 1.5% after three months of decline. By
contrast, consumer durables orders fell back 2.7% on the month, while
non-durables orders gained another 0.1% after a 2.6% rebound in November
to post the sole annual gain across branches.

Leading indicators suggest the recovery at year’s end was only
temporary, although the deterioration in domestic demand appears to be
easing and there are tentative signs of a recovery abroad. This supports
hopes that the slump in industry will be shallower than three years ago.
As yet, however, there is little sign for a reversal of the cyclical
downturn.

Eurozone manufacturers’ assessment of order books eroded further in
January, slipping below the long-term of the European Commission’s
survey. Back orders were below average everywhere except for Malta,
Slovenia and, of course, Germany. The February PMI poll showed orders
falling for the ninth consecutive month (47.1) and hardly less than in
January (46.5).

German orders recovered 2.3% in December, lifted by robust demand
from outside the Eurozone, but were still 1.1% lower in 4Q. Ifo’s survey
signaled a marked recovery in manufacturers’ expectations at the
six-month horizon with support from foreign demand. The February factory
PMI, however, signaled no improvement in new orders (48.1).

New orders in France fell back 0.7% in December after a 1.5%
rebound in November. National data showed gains for autos and machines
tools offset by declines in most other branches. Producers polled by the
Bank of France last month reported slightly fuller order books and
Insee’s own surveys show domestic demand recovering in February, more
than outweighing a further deterioration in export orders. The factory
PMI poll showed total orders falling less than in January and the first
rise in export orders since July.

After a 7.7% slide since August, orders in Spain dropped another
1.2% in December to stand 4.6% lower on the year. Producers polled by
the Commission said the deterioration in order books continued in
January, but they were less pessimistic about near-term output prospects
than in December, perhaps thanks to hopes recovery in foreign demand.
The January PMI poll showed a flatter fall in total orders (43.4) and
export orders (45.8).

In Italy, orders bounced back 8.0% on the month, retracing more
than two thirds of the plunge since August thanks to a sharp rise for
machine tools, national data showed. Manufacturers’ assessment of
domestic and foreign orders recovered marginally in January, but demand
expectations fell to a 31-month low, according to Istat’s surveys. The
factory PMIs continued to signal declining total orders (44.8) and
export orders (48.3) in January, though less steep than in 4Q.

Apart from Germany and Italy, the only other reporting countries to
post monthly rise in orders were Ireland (+3.4%), Finland (+1.5%) and
Estonia (+3.0%). Elsewhere the monthly declines were fairly steep,
especially in Slovenia (-4.2%) but also in the Netherlands and Portugal
(both -2.5%) and Greece (-1.3%). Slovakia reported little change
(-0.1%).

Compared to previous-year levels, orders were lower everywhere
except in Germany (+1.7%) and Ireland (+10.7%), with particularly steep
annual declines in Greece (-9.4%), Finland (-9.8%), the Netherlands
(-12.7%) and Estonia (-27.4%).

–Paris newsroom +331 4271 5540; e-mail: ssandelius@marketnews.com

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