More gloom for Germany as retail sales, factory orders fall unexpectedly

German retail sales and factory orders both fell unexpectedly in November, according to official data released on Wednesday.

Retail sales were down 0.6% in real terms compared with October, federal statistics office Destatis said. Analysts had forecast a 0.5% increase.

Factory orders slumped 5.4% month on month on a seasonally and calendar adjusted basis against expectations of no change.

Carsten Brzeski, global head of macro at ING said the latest data confirmed the bank’s view that Europe’s biggest economy may enter “a light winter recession”.

“In fact, notwithstanding some more technical rebounds, there is still no trend reversal in sight for the German industry. It’s bottoming out at best,” he added.

“At the same time, disappointing retail sales suggest that the rebound in private consumption in the third quarter is unlikely to continue in the fourth quarter.”

“Unless Christmas shopping brings a positive surprise, private consumption is set to drop, and ongoing political and policy uncertainty combined with re-accelerating inflation make any substantial rebound in consumption unlikely.”

Reporting by Frank Prenesti for Sharecast.com