German recession fears grow as factory orders tumble - business live

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German recession fears grow as factory orders tumble - business live

Rolling coverage of the latest economic and financial news, as Germany’s manufacturers struggle againGerman factory orders slumped 1.6% in DecemberOrder books were 7% lower than 12 months agoEconomy ministry: Industry is in a weak patchDeutsche Bank: Recession is comingI’m a Celebrity … app maker forced to pull gambling adverts 12.00pm GMT Recent German manufacturing data do not paint a pretty picture:That does not look good. #German #Factory #Orders disappoint in December. Outlook for the industrial production is deteriorating. pic.twitter.com/4AfL9DkbDm 11.31am GMT Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, has now weighed in on this morning’s dire German factory orders.He says the 1.6% month-on-month decline was a “nasty headline”, adding: “Across sectors, weakness in capital and intermediate goods were the primary drivers, especially on the export side to non-eurozone countries. By contrast, new orders for consumer goods rebounded strongly across the board, pointing to a revival in the auto sector towards the end of the year.“The year-over-year rate was depressed by base effects from a very strong finish to the year in 2017, but the message remains clear: German manufacturing is suffering.” 11.17am GMT Europe’s competition authorities have just derailed a massive planned merger between trainmakers Alstom and Siemens, triggering a massive political row.Antitrust commissioner Margrethe Vestager has ruled that allowing France’s Alstom and Germany’s Siemens to combine would have created a near monopoly in the European train-making market.We need signalling systems to keep us safe & very high speed trains for climate friendly transport. @SiemensMobility and @Alstom are champions in rail industry. Without remedies the merger would have resulted in higher prices, less choice & innovation, so the merger is blocked.“The Commission prohibited the merger because the companies were not willing to address our serious competition concerns.”“It’s going to serve China’s economic and industrial interests.”Am I wrong to think this will make it significantly harder for Vestager to secure French support for a commission presidency bid? https://t.co/otYVW2AbX4 10.53am GMT Ocado’s shares have now slumped by 7.5% since it warned that the fire at its Andover distribution centre was worse than first feared.That wipes more than £500m off the value of the company, leaving it firmly stranded at the bottom of the FTSE 100 leaderboard. Related: Ocado says fire at warehouse will hit sales growth and orders  10.01am GMT German carmaker Daimler has reported that net profits almost halved in the last quarter of 2017, as the diesel crisis hurt demand.Daimler’s earnings were scraped by the cost of developing new, greener, technologies for electric vehicles.“For Daimler, 2018 was a year of strong headwinds,” said CEO Dieter Zetsche, presenting his last annual results before handing off to successor Ola Kallenius at the May 21 shareholder meeting. He said that “we cannot and will not be satisfied” with lower profit margins. He added that the company was coming up with plans to increase profitability though declined to indicate what steps might be taken.  9.40am GMT More reaction to today’s German data:Uh-oh! #Germany's factory orders are down a whopping 7% YoY in December. Germany is not of out the #recession woods yet! pic.twitter.com/ojUqd0OCUPGermany jumped out of the frying pan into the fire... Construction PMI (January) 50.7 vs. 53.3 prior ! #Germany #EURUSD #DAX 9.36am GMT Britain’s watchdogs have been showing their teeth this morning.The Advertising Standards Authority’s (ASA) has banned gambling ads that ran in ITV’s I’m a Celebrity … Get Me Out of Here app for breaking rules designed to protect children from being encouraged to bet. Related: I'm a Celebrity … app maker forced to pull gambling adverts  9.28am GMT Here’s our news story about the crackdown on travel sites who use unscrupulous tactics to scare people into making holiday bookings: Related: Hotel booking sites forced to end misleading sales tactics When booking sites tell you a hotel was "booked four times in the last day", did you know that they mean "for any dates", not just the ones you're looking for? Or that if you saved "£50 by booking here", that may be compared to a completely different rate? https://t.co/rCErv5oJum 9.11am GMT More bad news from Germany -- growth across its building sector almost fizzled out last month.Data firm Markit says its German construction PMI (which measures activity across the sector) fell to just 50.7, down from 53.3 in December. That’s worryingly close to stagnation (50.0).The fact that growth in total industry activity slowed down more than new orders, which remained comparatively robust, suggests that it wasn’t necessarily a demand-driven slowdown and that severe bad weather probably did cause some disruption to actual work on the ground during the opening month of the year. 8.46am GMT European stock markets have opened in the red, after this morning’s woeful German factory orders.In Frankfurt, the DAX index of Germany’s top companies has lost 0.3%, with Daimler down almost 2% and Deutsche Bank down 1.5%.Unfortunately the fire which started yesterday morning in a corner of the ambient grid was not contained as we believed, and last night expanded. Whilst we are informed by the Fire Brigade that it is now under control, during the night part of the roof collapsed and there has been substantial damage to the majority of the building and its contents.  8.40am GMT Today’s grim factory orders data come just hours after Deutsche Bank warned that Germany is probably heading for recession.In a new report, Deutsche economists wrote:“The start of the German economy into 2019 has been a major disappointment so far.“The development of several key cyclical indicators is telling us that the German economy is drifting towards recession right now.”Deutsche Bank Says German Economy Is Drifting Toward Recession https://t.co/XVXggfXLrx 8.04am GMT German factory orders “took a nosedive” in December, says economist Carsten Brzeski of ING ruefully, adding:The inventory build-up in recent months, as well as the recent drops in order books, suggest that any rebound of industrial activity in Germany will be slow and sluggish. 7.56am GMT Germany’s economy ministry doesn’t see much cheer in today’s factory orders, saying:“The decline in orders in December suggests that the weak phase in industry will continue for now.The latest sentiment indicators also point to muted momentum at the start of the year.” 7.54am GMT The decline in German factory orders was mainly due to weaker demand for abroad. Orders from outside the eurozone plunged by 5.5% month-on-month in December, while domestic orders dipped by 0.6%. 7.43am GMT Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. #Germany Dec #Manufacturing Orders:*M/M: -1.6% v 0.3%e (largest ⬇ since June 2018)*Y/Y: -7.0% v -6.7%e (largest ⬇ since June 2012) pic.twitter.com/PRZVSnoPXSThe Recession word is getting louder. #Germany's Industrial Order dropped 1.6% in Dec m/m vs a gain of +0.3% expected. Capital goods orders fall 2.5% m/m. pic.twitter.com/J4cA5gmyNQInterserve has announced an epic debt-for-equity swap which saves the company but massively dilutes existing shareholders:“the shares issued through the Placing and Open Offer will account for 97.5% of the ordinary share capital of Interserve”https://t.co/kxdbJbPzSX Related: Cabinet Office voices concern over Interserve rescue deal  Continue reading...

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