German Factory Orders Drop As Virus Slows Activity By Bloomberg

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© Reuters. German factory orders decline as virus slows activity

(Bloomberg) – fell for the first time in eight months after the spread of the coronavirus forced the euro area’s largest economy and many of its trading partners to crash. Demand fell 1.9%, held back by investment goods and orders from the euro area. Orders were still up more than 6% from the previous year. Manufacturing has held up better than services in recent months, as global supply chains and external demand were less affected by the virus than during the first wave of infections in 2020. Restaurants and a large part of the The retail sector is much more directly affected by the latest restrictions, which are scheduled to run until at least mid-February. The Berlin government cut its growth forecast for the year to 3% from 4.4% last month. This week it agreed to further support businesses and citizens affected by the consequences of the pandemic, including by increasing the amount of losses a business can write off against taxes. While the German economy achieved 0.1% growth in the final three months of last year, it is heading for a contraction in the first quarter amid continued restrictions on activity. The slow and chaotic start of vaccines in the euro area threatens to compound the challenge.

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