Europe Industrial Orders Drop Record 34.5% on Global Recession
European industrial orders fell the most in at least 13 years in February as the worldwide economic slump lowered demand for factory equipment and metals.
Industrial orders in the euro area declined 34.5 percent from the year-earlier month, after a revised 34.3 percent drop in January, the European Union’s statistics office in Luxembourg said today. The February drop is the seventh straight decline and the largest since the data series began in 1996. Economists forecast a 34.8 percent decline, according to the median of nine estimates in a Bloomberg survey. From the prior month, February orders fell 0.6 percent.
The International Monetary Fund yesterday forecast the euro-region economy will contract 4.2 percent this year as the global recession will be deeper and the recovery slower than previously thought. As financial markets take longer to stabilize, that is increasing pressure on the European Central Bank to outline more unconventional tools to revive economic growth.
“Europe is basically waiting for the global economy” to pick up, said Nick Kounis, chief European economist at Fortis Bank Nederland in Amsterdam. “We’ll still see negative numbers for industrial orders in the coming months but increasingly less negative.”
The ECB has “room to further cut the main refinancing rate,” the IMF said. The Frankfurt-based central bank this month lowered its benchmark interest rate by a quarter point to a record low of 1 payday loans.25 percent to spur lending and stimulate the economy. The bank will present “new non-standard measures” on May 7, according to ECB President Jean-Claude Trichet.
Dairy Cows
GEA Group AG, the German factory-equipment maker whose machines milk a third of the world’s dairy cows, said yesterday its first-quarter orders plummeted 22 percent. The deteriorating world economy has prompted GEA to eliminate 1,400 jobs and shut two factories, and Chief Executive Officer Juer Oleas told shareholders more cuts will come if the outlook worsens.
MTU Aero Engines Holding AG, the German partner in the group building engines for Airbus SAS’s A400M transport plane, today said first-quarter profit fell 30 percent as the recession hit the aviation industry. Schaffner Holding AG, which supplies electricity filters for Bombardier Inc.’s trains, reported a fiscal first-half operating loss as sales fell 17 percent and orders dropped 27 percent.
Today’s euro-area report showed orders excluding transport equipment dropped 34.1 percent in February from a year earlier. Orders for metals and machinery fell 38.4 percent.
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