Germany’s factory orders in March surprisingly declined, indicating that growth in the world’s fourth largest economy is still uneven.
The Federal Statistics Office said on Wednesday that factory orders, when adjusted for inflation and seasonal fluctuations, plunged 2.8 percent from February. The orders had rose 0.9 percent in February. March’s orders lagged the median estimate of an increase of 0.3 percent given by economists in a survey by Bloomberg News.
Domestic orders plunged 0.6 percent in March from a month earlier, while foreign orders fell 4.6 percent. Euro zone orders declined 9.4 percent, while those from outside the economic bloc tumbled 1.7 percent.
Germany’s economy faces various risks such as the Ukraine tensions, persistently low inflation and China’s economic slowdown. The European Commission revealed in its quarterly forecast that it expects a “dynamic, broad-based growth” of the German economy. However, Bundesbank expressed concerns that the economy will slow down considerably in the coming months.
“There are risks that could slow down growth,” said Michael Holstein, a Frankfurt-based economist at DZ Bank told Bloomberg. “But the major positive factor from abroad is that the euro area is recovering, and the effect for the German industry is bigger than negative influence from China or Russia.”
Europe’s largest economy expanded 0.4 percent in the fourth quarter of 2013. The Federal Statistics Office is expected to announce the results for the first three months of this year on May 15.
Economists surveyed by Bloomberg predict that the European Central Bank will maintain its current target interest rate at 0.25 percent.