Oct preliminary: +1.8% m/m, +1.6% y/y

MNI median forecast: +2.3% m/m, +3.5% y/y
MNI survey range: flat to +4.0% m/m

Sept revision: -7.8% m/m (-6.4%)
August revision: +1.7% m/m (+1.4%)
July revision: -1.7% m/m (-1.9%)
June revision: -0.9% m/m (-0.7%)
May revision: +3.5% m/m (+3.3%)
—

PARIS (MNI) – Eurozone industry orders recovered less than
generally expected in October despite a strong boost from demand for
heavy transport equipment, Eurostat said Wednesday.

Taking account of a large downward revision for September, the 1.8%
upturn in October left orders only 1.6% higher on the year and still
more than 12% below pre-crisis peaks.

October orders were 3.1% below the 3Q average, which itself was
down nearly 2.8% from 2Q. The final months of last year most likely
accentuated the downward trend.

In contrast to September, October’s results were skewed higher by a
rebound 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% after a 5.5% downturn in September.

The jump in heavy transport demand left capital goods orders 1.6%
higher on the month, the only category to post a gain. Orders for
intermediate goods slipped another 0.2%, while consumer durables orders
dropped 2.3% and non-durables fell 0.5%.

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 for a reversal of the cyclical downturn.

Eurozone manufacturers’ assessment of order books in October 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 December PMI poll showed orders falling for the seventh
consecutive month (43.5), though at a slightly slower pace than in
November. Still, the 4Q decline was the steepest in more than two years.
Order backlogs continued to be depleted rapidly (43.6).

German orders had surprised on the upside in October with a 5.5%
rebound after three months of steep decline. National data showed that a
recovery in bulk orders gave a strong boost to demand for capital goods,
mainly from abroad. Ifo’s survey showed manufacturers’ assessment of
current business eroding further in November and December and
expectations at the six-month horizon little changed from previous lows.

New orders in France slipped 0.3% in October after a 6.8% downturn
in September. National data signaled a drop in the heavy transport
branch that outweighed a modest recovery on balance in other sectors.
Manufacturers’ assessment of total order books eroded markedly in
December, reflecting a steep drop in domestic demand.

In Spain, orders fell 2.2% after a 5.4% downturn in September to
stand 3.4% lower on the year. Producers polled by the Commission in
November were much more pessimistic about order book levels and
near-term output prospects than in October. The PMI polls also show
demand falling fast in recent months, with the new orders component
hovering between 40 and 41.

Following a 9.2% plunge in September, Italian industry orders fell
another 1.1% in October, led by a sharp drop for machines and equipment,
national data showed. Manufacturers’ assessment of order books has
eroded further in the meantime, falling to a 19-month low in December,
Istat’s surveys show. The factory PMI orders component remained below 40
throughout 4Q.

Besides Germany’s strong monthly boost, the only other support to
demand came from the Netherlands (+1.8%), Slovenia (+0.7%) and Estonia
(+2.4%). All other reporting countries sustained declines, ranging from
Slovakia (-0.2%) and Austria (-0.3%) to Finland and Portugal (both
-3.6%) and Belgium (-4.3%).

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

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