German industrial orders data underline growing concerns that Europe's biggest economy is heading towards an economic slowdown, eking out a smaller-than-expected rise and showing a decline in domestic demand. David Pollard reports.
The spark hasn't gone from Germany's production lines yet, but industrial orders are cooler. A smaller than expected rise in what is admittedly volatile data still playing on concerns that Europe's biggest economy is slowing. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "Year over year, the industrial sector is down in Germany. That's not a good thing .... That kind of fits in a kind of general deterioration in manufacturing globally at the moment, particularly because of the slowdown in demand from China." On the month in July, orders were up just 0.2 per cent where a half a per cent rise was expected. Domestic demand fell three per cent - though foreign demand was up strongly. And euro zone countries ordered a bumper 5.9 per cent more. That coming in a week when other data suggests the euro zone is weaker than it's been since the start of last year should cheer the ECB. Though some economists would still like a policy rethink. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "It's lowering rates, making borrowing more attractive for investors and businesses. But banks for their part are just not really passing that through because of the high number of non-performing loans." Which means, the argument goes, low growth for some time to come - new figures confirming a slender 0.3 percent rise in Q2. Even as it tries to buy its way out of trouble. After 18 months of bond purchases, the ECB's government debt holding passing the one trillion euros mark last week - and counting. Though Draghi could still hint at even bigger bond purchases to come at this week's policy meeting.