Euro zone industrial new orders weakened much more than expected in August, data showed today, strengthening expectations that the economy fell into recession in the third quarter.
Orders in the 15-country currency area fell 1.2 per cent month-on-month for a 6.6 per cent year-on-year contraction, European Union statistics office Eurostat said.
The fall came mainly because of a 10.6 per cent month-on-month plunge in volatile demand for ships, planes and trains because when those were excluded, orders rose 0.6 percent on the month. However, they still fell 7.5 per cent annually.
More downward pressure came from a sharp drop in demand for textiles, orders for which fell 6.5 per cent in monthly terms and 19.5 per cent on an annual basis.
Industrial orders indicate the level of future industrial activity, but the data still covers a period before the year-old global credit crunch turned into the worst crisis on financial markets since the 1930s in September and October.
The figures reinforced expectations that the European Central Bank would lower interest rates again this year following an emergency 0.50 percentage point cut in October.
Reuters