German Factory orders slump

Manufacturing orders have reduced considerably in Germany for March which is as a result of reduced demand by both the domestic and Euro Zone markets, which represents the fourth consecutive month of such a trend.

This has been accentuated by the fact that inflation has reduced consumption, coupled with the fact that the euro is strong and has subsequently affected the export market, especially to the UK.

Even with the adjusted made for seasonal changes figures, released by the Economy Ministry in Berlin today, reveal that orders have reduced by 0.6 percent from February

Overall, orders have fallen 5 percent in the year, the first drop in the annual figure since March 2005, and in general the manufacturing growth in Europe is down mainly due to the record oil prices and crippling inflation.

It is likely that the European Central Bank will continue to not make any changes to the interest rates due to their stance on economic growth and inflation.

The euro has fallen by more than half a cent to as low as $1.5419 as soon as the report was released in Berlin today, before the announcement it traded at $1.5472.

Analysts predict that with the cooling of the economy, interest rates will have to be cut soon, with Juergen Michels, an economist at Citigroup in London putting a date as early as September.

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