Nov preliminary: -1.3% m/m, -2.7% y/y

MNI median forecast: -2.0% m/m, -2.3% y/y
MNI survey range: -4.0% to +0.6% m/m

Oct revision: +1.5% m/m (+1.8%)
September: -7.8% m/m (unrevised)
August: +1.7% m/m (unrevised)
July revision: -1.9% m/m (-1.7%)
June: -0.9% m/m (unrevised)
—

PARIS (MNI) – Eurozone industry orders fell less than
generally feared in November despite a drag from weaker demand for heavy
transport equipment, Eurostat said Tuesday.

Taking account of a downward revision for October, the 1.3% drop in
November left orders 2.7% lower on the year and nearly 14% below
pre-crisis peaks. October-November orders were 4.0% below the 3Q
average, which itself was down 2.8% from 2Q.

In contrast to October, November’s results were skewed lower by a
drop in orders for heavy transport equipment, which tend to be very
volatile with a limited immediate impact on production. Excluding this
category, orders declined 0.5% on the month after -0.7% in October and
-5.6% in September.

The drop in heavy transport demand left capital goods orders 2.1%
lower on the month. Orders for intermediate goods fell another 1.3%, for
a slide of some 5% since August. Consumer goods orders fared better with
a 0.9% upturn for durables and a 1.7% rebound for non-durables.

Leading indicators show demand at home and abroad deteriorating
in the meantime but at a somewhat slower pace. This supports hopes that
the slump in industry may be shallower than three years ago. However,
there is as yet no sign of a reversal in the cyclical downturn.

Eurozone manufacturers’ assessment of order books in December was
still above the long-term average of the European Commission’s survey,
thanks largely to the high level of back orders in Germany. But the
steady deterioration in recent months testifies to the decline in new
business.

The January PMI poll showed orders falling for the eighth
consecutive month, though at the slowest pace in six months. The
depletion of back orders slowed as well.

German orders had surprised on the downside in November with a 5.0%
plunge that retraced the rebound in October. All branches were hit, led
by foreign demand for capital goods, national data showed. Ifo’s survey
showed manufacturers’ assessment of current business eroding further in
December and expectations at the six-month horizon little changed from
previous lows.

New orders in France bounced back 1.4% in November after a 7.1%
slide since August. National data showed further strong demand for
high-tech equipment, clothing and metals, but a downturn for autos.
Excluding the heavy transport, which rebounded from a setback in
October, total orders rose 1.0% on the month. A Bank of France survey
signaled lighter order books in December, while Insee’s own survey
showed a marked erosion in firms’ assessment of both domestic and
foreign order books in January.

In Spain, orders slipped another 0.8%, bringing to 7.9% the fall
since August, for 3.3% decline on the year. Producers polled by the
Commission said the deterioration in order books continued in December
but they were less pessimistic about near-term output prospects than in
November. The PMI polls also show demand falling fast in recent months,
with the new orders component hovering between 40 and 41.

Following a 9.5% plunge since August, Italian industry orders
dropped another 1.5% in November to stand 2.3% lower on the year.
Manufacturers’ assessment of order books has eroded further in the
meantime, Istat’s surveys show. The factory PMI orders component
remained below 40 throughout 4Q.

Results for other reporting countries were mixed, with notable
monthly gains in Finland (+5.7%) and Ireland (+14.5%) and a marked
downturn in the Netherlands (-3.0%).

Apart from Portugal, where orders were sharply lower on the year
(-25.0%), annual comparisons were generally more flattering for the
smaller economies, with strong gains in Slovenia (+6.2%), Ireland
(+9.8%) and Estonia (+12.4%).

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

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