Industrial new orders in the Euro area continued to contract in January, to record the steepest fall in about 13 years, official data showed Friday.

Data released by the Eurostat showed that industrial new orders in the Eurozone plunged 34.1% on an annual basis in January, sharper than the 23.8% drop recorded in December. New orders fell for the sixth consecutive month, and the January drop marks the steepest on record. Industrial orders also declined more than economists' expectations of a 28.4% drop.

The weakness in industrial orders was seen among all categories of goods. Industrial new orders for intermediate goods slipped 33.3% annually in January compared to a 24.9% drop in the previous month, while that for capital goods plunged 39.7%, sharper than a 24.9% fall in December. New orders for consumer durable goods were down 25.7% compared to a 16% drop. Moreover, new orders for non-durable consumer goods dipped 10.6%, reversing a 1% rise in the previous month.

Excluding heavy transport equipment, new orders plunged 34.1% in the month, after a 24.1% drop in the December.

Month-on-month, industrial new orders fell 3.4% in January, following an 8% drop in the previous month and steeper than a 5.6% fall expected by economists.

Data released earlier in the day also revealed that industrial orders in Italy, one of the member countries adopting the euro currency, dropped 31.3% in January, faster than economists' expectations of a 21.8% fall.

Meanwhile, in the European Union, industrial new orders slipped 2.2% in January compared to a 6.8% fall in December. Annually, new orders were down 30.7% compared to a 24% drop in the preceding month.

Industrial production in the Eurozone has also shown the worst performance in about 19 years in January. Industrial output fell 17.3% year-on-year in January, marking a steeper fall compared to an 11.8% fall in December.

The Eurozone economy also recorded the weakest GDP figure in the fourth quarter. The 16-nation economy contracted 1.5% sequentially in the fourth quarter, the worst reading since data began to be collected in 1995.

The Commerzbank expects the Eurozone economy to shrink 4.5% in the current year, from an earlier forecast of 2-3% contraction. At the same time, the firm expects GDP in the area to drop 2.2% sequentially in the first quarter.

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