Germany appears to be heading towards an economic contraction, after data showed factory orders fell by 1.9 percent in April. This was much lower than the analysts’ expectations for a 1.1 percent drop.
In comparison to April of last year, factory orders were down 3.8 percent since then, and March reported orders were revised higher for a 3.2 percent increase.
Meanwhile, a little before the factory data, German composite Purchasing Managers’ Index result for May came in at the lowest level in three years indicating a contraction in German output. The drop in production suggests that the worry over the European debt crisis is now pressuring the German economy, and Q2 GDP could come in lower.