German industry orders surge in January by most in 5-1/2 years

BERLIN (Reuters) - German industrial orders surged in January on bumper aerospace and mechanical engineering bookings, the Federal Statistics Office said on Friday, giving the manufacturing sector a big boost at the start of a quarter marred by the coronavirus.

Contracts for 'Made in Germany' goods rose 5.5% from the previous month, the Statistics Office said. That was the biggest rise since July 2014 and compared with the Reuters consensus forecast for a 1.4% increase.

"The strong increase is of course good news for the German economy. There was probably a catch-up effect here due to the timing of holidays at the end of last year, which was not covered by the usual seasonal adjustment," said Jens-Oliver Niklasch, economist at the LBBW bank.

"At the moment, however, figures from the pre-corona era should leave the financial markets comparatively cold."

Germany has now reported 400 cases of the coronavirus, which emerged in China late last year and is spreading around the world. Germany has not reported a fatal case yet.

China is Germany's biggest trading partner. Manufacturers depend on both demand and supply chains from China.

Domestic businesses hit by the outbreak include hotels and transportation companies. Several international trade fairs have been cancelled, including the ITB Tourism Fair, which was due to take place in Berlin this week.

Berlin is helping small- and medium-sized firms to bridge sudden liquidity problems and avoid layoffs through labour market instruments such as short-time working programmes.

Finance Minister Olaf Scholz and Economy Minister Peter Altmaier have said the government is ready to do everything it takes to shield the economy from the impact of the coronavirus. Senior members of the government are expected to discuss additional measures at a meeting on Sunday.

(Reporting by Paul Carrel and Rene Wagner; Editing by Riham Alkousaa and Kevin Liffey)