Sept preliminary: -6.4% m/m, +1.6% y/y

MNI median forecast: -2.7% m/m, +5.2% y/y
MNI survey range: -4.0% to -1.8% m/m

August revision: +1.4% m/m (+1.9%)
July revision: -1.9% m/m (-1.6%)
June: -0.7% m/m (unrevised)
May revision: +3.3% m/m (+3.5%)
April revision: -0.3% m/m (-0.1%)
—

PARIS (MNI) – Eurozone industry orders dropped much more than
expected in September, dragged down by a plunge in heavy transport
equipment, Eurostat said Wednesday.

Taking account of downward revisions for previous months, the 6.4%
downturn left orders only 1.6% higher on the year and more than 13%
below pre-crisis peaks. Despite the short-lived recovery in August, 3Q
orders dropped 2.5% on the quarter after gains of 2.1% in 2Q and 3.3% in
1Q.

As in August, September’s results were skewed lower by a drop in
orders for heavy transport equipment, which tend to be very volatile
with a limited immediate impact on production. But even excluding this
category, orders were still down 4.3%, undershooting analysts’
forecasts.

The drop in heavy transport demand left capital goods orders 6.8%
lower on the month and just 0.6% higher on the year. Other branches
sustained milder declines. Orders for intermediate goods were down 3.2%
after two months of recovery to stand 3.1% higher on the year. Consumer
durable orders slipped 0.6% after a 1.0% downturn and were 1.3% higher
on the year. Non-durables orders fell 2.0% for a 0.8% gain on the year.

Excluding heavy transport, orders declined 0.8% in 3Q after a 0.2%
dip in 2Q.

Leading indicators show demand at home and abroad waning further in
the meantime but at a somewhat slower pace, which supports hopes that
the slump in industry may be shallower than three years ago. However,
there is as yet no sign of a reversal of the cyclical downturn.

Eurozone manufacturers’ assessment of order books in October was
still above the long-term average of the European Commission’s survey,
thanks largely to the high level of back orders in Germany. Still, the
steady deterioration in recent months testifies to the decline in new
business.

The flash November PMI polls were more dire, showing orders
declining for the sixth month in a row at the fastest pace in 30 months.
Order backlogs were also depleted at the quickest clip in over two
years.

German orders had surprised on the downside in September with 4.4%
drop that still gave a 3.8% annual rise. National data showed this was
largely due to declining bulk orders and contracting demand from within
the Eurozone. Ifo’s survey showed manufacturing sentiment eroding
further in October, though at a slower pace than during the summer.
Expectations at the six-month horizon recovered slightly from a two-year
low.

New orders in France fell back 6.2% after a 3.6% recovery in August
to stand 3.1% higher on the year. National data showed that half the
downturn was due to heavy transport sector. Excluding this category,
orders still fell 3.1%, with declines in nearly all key sectors.
Manufacturers’ assessment of total order books was little changed in
October and November, despite a further erosion for export orders,
Insee’s surveys show.

In Spain, orders plunged 5.3% after a 3.4% rebound in August but
were still 3.4% higher on the year. Producers polled by the Commission
in October were slightly less pessimistic about order book levels and
near-term output prospects than in September, suggesting that demand may
have hit a floor for the time-being.

Orders collapsed in Italy with a 9.2% dive that gave a 4.3% drop on
the year. Manufacturers polled by Istat in October said orders had
weakened further, but they hoped for a stabilization in demand and
production in the near term.

Apart from Estonia (-9.1%), monthly declines in other reporting
countries were less steep, led by Greece (-3.3%) and Portugal (-2.3%).
Modest gains were posted in Slovenia and Slovakia (both +0.5%) and the
Netherlands (+0.1%).

Compared to previous-year levels, orders were higher everywhere
except in the Netherlands (-4.8%) and Ireland (-1.6%), led by Slovakia
(+10.5%), Slovenia (+7.8%) and Finland (+2.4%).

–Paris newsroom +331 4271 5540; e-mail: ssandelius@marketnews.com

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