German industrial orders bounced back in August, rising more than expected on strong foreign demand. As David Pollard reports, it suggests factories will contribute to overall growth in Europe's largest economy in coming months - and add to pressure on the ECB for clarity over the future course of its stimulus programme.
The euro zone's on a strong recovery story .... But it's demand from elsewhere that's boosting German industry. August orders show a strong bounce back - on a near eight per cent increase in demand from customers outside the currency region. Overall, contracts for German goods rose 3.6 per cent. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "Germany's industrial success is down to a lot of things including pretty decent control over local costs and productivity, reasonably good growth in those parts of the world in which Germany exports and of course the very fact that Germany produces many of the goods which are in demand." But Spain's goods are also in demand - it's reporting a rise in industry output of 1.8 per cent on the year in August. While France say its trade deficit narrowed on a rebound in exports. The headlines getting better for the euro zone - and more attention-grabbing for its central bank. Though with other troubling headlines in Spain - as Catalonia ponders breaking away - the ECB might tread carefully for now. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "Clearly the strength of the data over the course of certainly the last few months has I think made it easier for the ECB to think about taking back some of the quantitative easing by tapering and. You know we we would expect a fairly strong hint in the next few weeks as to as to how the ECB wants to play this." Germany's economy ministry said the upturn in manufacturing should continue. Though one analyst says the latest numbers could be inflated by bulk orders. And others were even more cautious - saying Germany may have already seen its growth peak for this year.