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Euro zone June orders growth beats expectations

European Union statistics office Eurostat said orders in the 13 countries using the euro increased 4.4 percent from the previous month for a 13.8 percent year-on-year jump.

But excluding planes, ships and trains, orders rose 1.4 percent on a monthly basis and 7.0 percent year-on-year.

For the overall figures, economists polled by Reuters had expected gains of 2.0 percent on the month and 12.4 percent on the year.

“These data are old by necessity and cannot by definition reflect any of the turmoil, which is likely to lead to a significant slowdown especially in business investment activity and orders later this year,” said Holger Schmieding, co-head of Europe economics at Bank of America.

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.

“So it’s kind of good news, because we had some signs of industrial weakness and with all the market turmoil it’s good to have signs that the real economy is still for the time being on a solid track,” said Stephane Deo, economist at UBS.

Eurostat revised down its May industrial orders data to a gain of 1.5 percent month-on-month from the previous reading of 1.7 percent, and to an annual increase of 7.5 percent versus the 9.1 percent growth initially reported.

Many economists no longer expect the ECB to increase its main interest rate in September from the current 4.00 percent.

“The ECB, if markets calm down, will go ahead (with a rate rise) in September. But if markets stay as nervous as they have been until now, they probably will not,” Schmieding said.

Eurostat said that in month-on-month terms, orders rose the most for transport equipment -- 15.7 percent, with the figure increasing 38.6 percent year-on-year.

Orders for machinery and equipment, which are often exported, dipped 0.1 percent month-on-month amid continued strength of the euro. They soared 14.5 percent year-on-year.

Eurostat said that compared with the same period of last year, orders jumped 19.4 percent in both Germany and France, the euro zone’s largest and second-biggest economies.

The figures turned out strong in many of the European Union’s new member states in central and eastern Europe, with Poland recording a 56.4 percent annual gain.

In the whole, 27-nation EU, industrial orders rose 4.9 percent in June from May and by 14.0 percent in yearly terms.