Euro zone industrial orders surge in June

* Euro zone June orders up 2.5 pct m/m, 22.6 pct y/y

* Figures augur well for Q3 growth

By Marcin Grajewski

BRUSSELS, Aug 24 (BestGrowthStock) – Euro zone industrial new orders
rose slightly more than expected during the month of June, data
showed on Monday, boding well for economic growth in the third
quarter of 2010.

Industrial orders in the 16-nation currency zone increased
2.5 percent month-on-month for a 22.6 percent annual gain,
European Union statistics office Eurostat said.

Economists polled by Reuters had expected figures of 1.5
percent and 22.9 percent respectively.
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The data could point to another quarter of economic
expansion as the euro zone recovers from its sovereign debt
problems and the worst economic crisis in decades. Orders point
to trends in activity as they translate into future production.

Gross domestic product expanded by 1.0 percent in the second
quarter from the previous one, the fastest pace in four years.
But some economist say growth will falter in the coming months,
partly due to austerity measure ordered by many governments to
ward off sovereign debt crisis.

Eurostat revised up May industrial orders to 4.1 percent
month-on-month and 23.0 percent annually, from previous readings
of 3.8 percent and 22.7 percent. The annual gain in May was the
biggest in 10 years.

Eurostat said that without volatile orders for ships, planes
and trains, the monthly increase in June was 1.6 percent and the
year-on-year jump was 22.5 percent.

The monthly growth of orders was driven almost exclusively
by a surge in demand for capital goods, which include machinery,
tools and equipment — pointing to corporate sector investment.
The figure rose 5.3 percent month-on-month and 22.7 percent
annually.

But orders for durable consumer goods and non-durable
consumer goods fell 1.1 percent and 1.8 percent respectively,
highlighting weak consumer demand.

Analysts say growth will become self-sustaining only if
consumers begins to spend more, a distant prospect considering
that the unemployment rate near a 12-year high of 10 percent.

Eurostat said that orders in the euro zone’s biggest
economy, Germany, increased 3.9 percent on the month and surged
32.8 percent year-on-year.

In the wider 27-nation European Union, industrial new orders
grew 2.4 percent in June and rose 22.5 percent annually.

(Editing by Luke Baker)

Euro zone industrial orders surge in June