In another big sign that Europe has fallen into recession, new industrial orders in the euro zone in August were much weaker than economists had expected with a plunge in demand for ships, planes, trains and textiles.
Industrial orders indicate the level of future industrial activity and the data covers a period before the financial crisis got really bad. The EU statistics office figures show orders in the 15 countries that use the euro fell 1.2 percent month-on-month and contracted 6.6 percent year-on-year.
In Germany, the euro zone’s biggest economy, industrial orders actually increased in August, but 3.3 percent, but still there are plenty of recession signs. German luxury car firm Daimler, which makes Mercedes, has just issued its second profits warning this year after third-quarter earnings plunged.
It has also temporarily halting production, for a week. One Daimler worker said he fears it will not be the last time: “There’s speculation about next year, closures at Easter, Pentecost, and maybe three weeks in the summer.” Another added: “They say when Daimler sneezes, the wider economy gets a cold and it looks like Daimler is sneezing.”
And Fiat has just put out a grim forecast. It said demand for its products worldwide could drop by 10-20 percent and its profit tumble by as much as two thirds in a “worst-case” scenario.