German data for industry show ‘freefall

The rapid slide in German industrial orders triggered by the global crisis shows little sign of slowing, with data yesterday indicating an 8 per cent fall in January.

The latest drop, which extended a 7.6 per cent seasonally adjusted fall in orders in December, heightened fears that Germany's economic performance in the first quarter of this year would be as bad as the final three months of 2008. Then, gross domestic product fell by 2.1 per cent – the worst quarterly result since German reunification in 1990.

Alongside Japan, Germany's economy – Europe's largest – has been among the worst-affected by the slump in global demand that followed the collapse of Lehman Brothers investment bank in September. January's industrial orders were 37.9 per cent lower than a year before, with overseas orders down 42.5 per cent.

“The manufacturing sector remains in freefall,” said Dirk Schumacher, European economist at Goldman Sachs. With Germany's deep recession dragging down its neighbours' performance, “any meaningful recovery in the euro area still seems far away”, said Elga Bartsch at Morgan Stanley.