February: +1.5% m/m, +12.2% y/y

MNI median: +1.0% m/m, +11.4% y/y
MNI range: +0.5% to +1.5% m/m

January: -1.6% m/m (revised from -2.0%)
December: +0.6% m/m (revised from +0.8%)
November: +3.1% m/m (revised from +2.8%)
October: -2.4% m/m (revised from -2.1%)
September: +2.1% m/m (revised from +1.7%)

—

FRANKFURT (MNI) – New orders in the Eurozone rebounded more than
generally expected in February, while the three previous months were
revised more favourably, with gains noted across all major components,
except non-durable consumer goods and heavy transport equipment demand,
Eurostat reported on Friday.

On the month, new orders increased 1.5%, matching the most
optimistic forecast. Taking the revisions from previous months, the
annual change came to +12.2%, up from January’s +7.5% figure (revised
from +7.0%).

Excluding demand for heavy transport equipment, which is known to
be volatile yet has a limited impact on overall production, orders rose
2.5% on the month and were up 14.0% on the year.

Intermediate goods orders increased 2.6% since January, leaving
demand 23.0% higher than one year ago, while demand for capital goods
rebounded 2.3% on the month, raising the annual gain to 8.4%.

Building on January’s rebound, durable consumer goods gained 2.5%
and were 5.6% higher on the year. However, the demand for non-durable
consumer goods continued to weaken, falling 1.2% on the month, widening
the annual decline to 2.4%.

The rebound in demand in February suggests that January’s drop was
a one-off, due most likely to the unusually cold weather conditions at
the start of the year. Sentiment surveys point to further gains in the
near term.

Manufacturers cited in March’s purchasing managers index (PMI)
report highlighted improvement in new orders, which grew at their
fastest rate since June 2000.

The PMI continued to rise in April, reaching a near-four-year high
of 57.5, as exports played a key role in boosting respondents’ order
book levels. Firms’ polled in the PMI noted improved foreign demand and
a competitive edge from the weak euro.

Firms surveyed by the European Commission also grew less
pessimistic regarding both their total order books and export order
books. However, manufacturers still saw demand trending below normal,
with the indicator well below the series average.

Among the larger Eurozone states, Italy recorded the most
pronounced rise in orders (+3.7% m/m, +4.9% y/y).

A vast majority of Italian manufacturers continue to view total
orders as below normal in March, the ISAE research institute reported.
However, excluding a brief uptick in January, this majority has been in
steady decline and lies at its lowest level since October 2008.

While managing only a modest gain on the month in February (+0.4%
m/m), the annual jump in German new orders was far more pronounced
(+24.5%). Orders in the manufacturing orders in Germany had surprised to
the upside, as robust foreign demand offset the weakness in domestic
orders, the Economics Ministry had reported.

According to the recent Centre for European Economic Research (ZEW)
sentiment indicator, stable orders, as well as growing exports, appeared
to “decisively” reinforce the upward revision to market participants’
expectations for the next six months.

Manufacturers polled in the most recent Ifo study also reported
growing expectations for exports, due to better opportunities in foreign
markets.

Foreign demand was also robust in France, partially offsetting
continued weakness in domestic orders and leaving total orders excluding
transport equipment, down (-1.3% m/m, -3.0% y/y) in February.

Boosted by ongoing improvements in total orders and a significant
jump in the outlook for the prospects of industry in general, French
industrial morale rose in April for the second consecutive month, the
national statistics institute, Insee, said Thursday. Insee’s findings
were mirrored in the most recent PMI report, in which French firms
attributed the accelerating growth in private sector output to incoming
new business. According to the PMI, the growth in new work was at its
highest since December 2009, leaving the manufacturing PMI at 56.7, a
45-month high.

–Frankfurt bureau; +49 69 720 142; frankfurt@marketnews.com

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