Eurozone industrial orders dip more than expected

The eurozone's July industrial new orders fell more than expected from June amid a plunge in the volatile reading for transport equipment, data showed on Monday. European Union statistics office Eurostat said orders in the 13 countries using the euro declined 4.0 percent from the previous month but jumped 10.9 percent year-on-year.
Economists polled by Reuters had expected a fall of 3.0 percent on the month and an annual gain of 10.4 percent. Excluding planes, ships and trains, July orders fell 0.1 percent on a monthly basis and grew by 11.7 percent year-on-year. Orders for transport equipment sank 16 percent month-on-month, but increased 10 percent in annual terms.
"Excluding that, orders were down just a bit ... If you look at the bigger picture, it looks as if orders continue to grow but they are moderating compared with last year or the beginning of this year, which is not unexpected," said Jose Alzola, euro area economist at Citigroup.
Eurostat revised up its June industrial orders data to a gain of 4.5 percent month-on-month from the previous reading of 4.4 percent, and to an annual increase of 14.0 percent versus the 13.8 percent growth initially reported. New orders give an indication of future industrial output and therefore overall economic activity, which in turn may impact interest rate decisions by the European Central Bank.
But Monday's data referred to the period before the global credit crunch originating in the US subprime mortgage sector, where home loans made to borrowers with poor credit histories were repackaged and sold on as asset-backed securities to institutional investors.
The US Federal Reserve's 50 basis point rate cut last week helped lift the euro to an all-time high versus the dollar on Monday, increasing worries about eurozone exports. Eurostat said that in July, when the euro was already strong, orders for often-exported machinery and equipment were up 2.5 percent month-on-month and 19 percent year-on-year.
Eurostat said that compared with the previous month, orders fell 7.9 and 2.9 percent respectively in Germany and France, the eurozone's largest and second-biggest economies. The figures turned out strong in annual terms in many of the European Union's new member states in central and eastern Europe, with Poland recording a 63.4 percent gain. In the whole, 27-nation European Union, industrial orders fell 3.9 percent from June but rose 13.2 percent in yearly terms.