European industrial orders increased the most in almost three years in March, led by surging demand for capital goods such as machinery.
Orders in the 16-nation euro area jumped 5.2 per cent from February, when they rose 1.9 per cent, the European Union's statistics office in Luxembourg said today. That's the biggest gain since June 2007. Economists forecast an increase of 2.5 per cent, the median of 15 estimates in a Bloomberg News survey showed.
From a year earlier, March industrial orders rose 20 per cent.
"Emerging economies are driving demand," said Jens Kramer, an economist at NordLB in Hanover, Germany. "Orders will continue to show more or less positive developments over the coming months. Capacity utilisation may not be high enough to boost investment spending, however."
Reviving export demand and a rebound in spending on machinery equipment propelled an economic expansion of 0.2 per cent in the first quarter after stagnation in the previous three months. Euro-area gross domestic product may rise 1 per cent in 2010, the International Monetary Fund forecast on April 21st.
The euro's 15 per cent drop against the dollar this year is boosting exports just as the global economy gathers strength.
In the US, the world's largest economy, manufacturing expanded at the fastest pace in almost six years in April.
German factory orders jumped more than economists forecast in March.
Munich-based BMW said on May 10th that sales increased 15 per cent in April and that it remains "confident for the next months." France's Vinci SA, the world's largest builder, said earlier this month that it expects 2010 revenue to increase after a drop in first-quarter sales.
Euro-area industrial orders for capital goods increased 5.7 per cent from February, when they rose 2.1 per cent, today's report showed. Orders for intermediate goods gained 5.4 per cent in the month and those for durable consumer goods rose 2.4 per cent. Orders advanced 4.5 per cent excluding heavy transport equipment such as ships and trains.
Bloomberg