·
German orders jumped in October rising by 4% after an upward revised drop of 1.6% in Sept. The gain saw the domestic orders component rise by 2.7% as foreign orders rose by 5%. Foreign orders are now rising at a 33% pace over three months and clearly accelerating while domestic orders post a slightly stronger three month growth rate of 2.9%. Sales of consumer and intermediate goods remain weak while capital goods sales surged in October.· Order detail shows that bulk orders account for the surge in October. Bulk orders were behind the 8.1% surge in investment goods orders that saw domestic investment goods orders rise by 6.4% and foreign orders rise by 9.4%. Basic goods orders fell by 0.4% in October and consumer goods order volumes fell by 0.8%. Orders from outside the Euro Area increased by 4.2% while Ex-German Euro Area orders rose by a sharp 6%.
· For the quarter underway orders are not tremendously strong with overall orders rising at an annual rate that exceeds 20%.
· On balance German institutes are still cutting their forecasts for 2008. The chart (above) shows that even with this new surge, orders are in lower trajectory than they were in their hey-day. It is unclear what this surge means for the outlook. It may be a fluke of orders clumping since most other measures continue to show slowing. I do not think it is a revival.