RTTNews - Stronger-than-expected recovery in Eurozone industrial new orders indicate that the economy is clearly moving away from recession.
Industrial new orders in the 16-nation bloc increased 3.1% month-on-month in June, after falling 0.5% in May, the Eurostat reported Monday. Growth in June far exceeded the expected 1.7% rise. The new orders for May was revised from the 0.2% fall reported initially.
On an annual basis, industrial new orders plunged 25.1% in June. But, this was slower than the revised 30.3% fall in the previous month and 28.6% decline expected by economists. The statistical office revised the annual decrease for May from the initial estimate of 30.1%.
Excluding orders for items like ships, railway and aerospace equipment, industrial new orders were up 1.9% month-on-month in June. This monthly growth pulled down the annual decrease to 26.7%.
At the same time, industrial new orders in the EU27 slipped 0.4% in June from the previous month, reversing the 0.5% increase seen in May. Annually, orders were down 24% in June.
Among the member states for which data was available, total manufacturing working on orders fell in twenty and increased only in Ireland. The largest annual falls were registered in Lithuania, Greece, Finland, Slovenia and Estonia.
The European Union's statistics office in Luxembourg said orders for intermediate goods and capital goods in the euro area dropped 31.1% and 25.9% from the prior year, respectively. Durable consumer goods orders plummeted 22.2%. On the other hand, non-durable consumer goods orders rose 0.3%.
In the second quarter, the Eurozone economy contracted slightly, giving positive signals of an early recovery in the single-currency area from a deep recession. The euro area shrank 0.1% sequentially in the second quarter, which was much slower than the record 2.5% decline seen in the first quarter.
According to a survey from Markit Economics, the Eurozone private sector economy showed signs of broad stabilization in August. The Flash Eurozone Composite Output Index rose to 50 in August from 47 in July. The latest reading marked the end of a fourteen-month stretch below the no-change mark of 50.
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