German factory order growth hits 2.5 year high
There’s no sign of Brexit damage in the latest manufacturing figures from Germany.
German factory orders, released this morning, have smashed forecasts by growing by a whopping 5.2% in December. That’s the best result since July 2014, and crushing the 0.5% expected by economists.
The economy ministry reports that domestic orders jumped by 6.7% during the month, while foreign orders rallied by 3.9%. Demand from eurozone countries was particularly robust, soaring by 10%.
However..November’s figures have been revised down to a 3.6% fall, from 2.5% previously.
The Brexit vote is also going to drive up prices in the shops this year.
A majority of firms surveyed by the British Chambers of Commerce are planning to hike prices in 2017, due to the slump in the pound last year.
The survey also punctures the idea that weaker sterling is a pure boost to exporters; instead, many are also having to pay higher prices for raw materials from abroad.
Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), explains:
“The depreciation of Sterling in recent months has been the main tangible impact that firms have had to grapple with since the EU referendum vote.
“Our research shows that the falling pound has been a double-edged sword for many UK businesses. Nearly as many exporters say the low pound is damaging them as benefiting them. For firms that import, it’s now more expensive, and companies may find themselves locked into contracts with suppliers and unable to be responsive to currency fluctuations.
Business chiefs: Brexit already having negative effect
More than half of Britain’s biggest companies are now suffering from the public vote to leave the European Union last June.
A new survey of business leaders found that 58% said the Brexit vote was already having a negative impact on their firm. Just 11% said it had helped business.
And stormclouds also appear to be gathering over the economy, with two-third of corporate chiefs leaders predicting that their business situation will be more negative once Britain leaves the EU.
In the long term…. 32% predict a positive impact on their business in five years’ time and 45% expected to feel a negative impact.
The survey was conducted by Ipsos Mori, who polled 114 chairmen, CEOs, managing directors and finance chiefs from Britain’s largest 500 firms
Ben Page, chief executive of Ipsos Mori, says that the survey shows that businesses are already feeling the pain of the economic upheaval of leaving the EU,.
According to respondents there is no sign that this is likely to ease this year, with two thirds saying they thought their business situation would get worse in the next 12 months.
The survey also found that business leaders are particularly worried about losing access to skilled workers.
Asked what Britain’s priorities should be in the Brexit negotiations, the business chiefs said:
- Movement/access of skilled labour (54%),
- securing free trade/single market (47%),
- passporting rights (16%),
- controlled/clarity on immigration (13%),
- continuing being a trading partner with Europe (9%),
- tariff agreement (9%)
The agenda: Data, select committees, and Draghi
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The new week kicks off with lots of economic data, two important UK select committee hearings, and the prospect of more drama in Europe.
On the data front, we’re finding out how German manufacturers and UK car sellers fared last month, and getting a gauge on investor confidence across the region:
- 07:00 GMT German Factory Orders
- 9am GMT: New UK Car Registrations
- 9:30am GMT: Euro-Zone Sentix Investor Confidence
Over in parliament, MPs on the Work and Pensions committee are holding a hearing into Britain’s Gig economy, from 3.45pm. They’ll hear from seven workers, including a Hermes driver who lost work after seeking time off to take his terminally ill wife to hospital.
Committee chairman Frank Field tells us the seven workers are all “incredibly brave”, given some still work for the likes of Uber, Deliveroo and Hermes.
Down the corridor, the Transport select committee will be investigating problems with Vauxhall Zafira cars, which have a nasty habit of overheating and catching fire.
According to the Daily Telegraph, Vauxhall executives will face a grilling (not literally, we trust) over the problems.
On the eurozone front, European Central Bank chief Mario Draghi testifying in Brussels from 2pm GMT. He’s likely to face calls from German MEPs to slow his stimulus programme, now that inflation is finally headint upwards.
We’ll also have an eye on the eurozone, where Greece’s bailout talks are still deadlocked and France is rattling towards its presidential elections.