By Jurjen van de Pol July 22 (Bloomberg) -- European industrial orders declined more than economists expected in May as the worst recession in six decades curtailed demand for machines and equipment. Orders to industrial companies in the euro region fell 30.1 percent from a year earlier, the European Union’s statistics office in Luxembourg said today. That was the 10th straight drop and followed a record 35.3 percent decline in April. Economists forecast a 27.9 percent fall in May, according to the median of 14 estimates in a Bloomberg survey. From the prior month, May orders fell 0.2 percent, also more than economists expected. Companies across the region have halted investments, hurting orders for capital goods, and cut jobs to cope with the worst global slump since World War II. Still, there are signs the economy is stabilizing after contracting by a record in the first quarter. Governments worldwide have announced about $2 trillion in economic stimulus programs, including packages to spur auto purchases to boost industrial orders. “The overall picture is that the industrial sector is close to stabilizing and probably will come out of recession not in the second quarter but in the third quarter,” said Nick Kounis, chief European economist at Fortis Bank Nederland Holding NV in Amsterdam. He forecasts the euro-area economy will grow 0.1 percent this quarter from the previous three months. While evidence is mounting that the global recession is easing, the euro zone will still be the worst performing major economy next year, the International Monetary Fund forecasts. The Washington-based lender sees the 16-nation economy shrinking 0.3 percent in 2010 after a 4.8 percent contraction this year. The IMF predicts that the U.S., Canada, the U.K. and Japan will return to growth. 1,400 Jobs Siemens AG said today that it plans to cut an additional 1,400 jobs as Europe’s biggest engineering company strives to meet its 2009 profit targets. A year ago, the German maker of trains, turbines and lightbulbs announced 17,000 job cuts, and 19,000 workers are currently on reduced hours. The European Central Bank expects the region’s economy to resume expansion in the middle of 2010. The ECB, which has pumped billions of euros into markets to support lending, kept its benchmark interest rate at a record low of 1 percent on July 2 and has announced plans to buy as much as 60 billion euros ($85.2 billion) of covered bonds, securities backed by mortgages and public-sector loans. “Unless things change dramatically for the worse, the ECB is done with new policy measures,” Kounis said. Excluding transport equipment, euro-area orders fell 30.2 percent from a year earlier, today’s data showed. Orders for metals and machinery dropped 32.3 percent. To contact the reporter on this story: Jurjen van de Pol in Amsterdam jvandepol@bloomberg.net

Source