3 January 2001, 12:30  West Germany Jan. Leading Index Falls to 2.4% from 2.7% In Dec

East Germany Jan. Leading Index Rises to 3.2% from 3.0% in Dec. FRANKFURT (MktNews) - The Handelsblatt leading economic index forwest Germany fell again in January, reaching its lowest level since November1999, while the indicator rose in east Germany, according to the businessdaily's Tuesday edition. The west German leading index fell to 2.4% in January from 2.7% inDecember and its recent peak of 3.3% in October. The latest reading was alsodown from the 2.6% figure recorded in January 2000. In east Germany, the index rose to 3.2% in December from 3.0% inNovember but was still well below the recent peak of 4.0% reached in bothAugust and September 2000. It was up from 2.8% in January 2000. The latest decline in west Germany was caused mainly by the ongoingweakness of the construction and retail sectors, while the rise in the east wasdue to a large bulk order in the manufacturing sector slightly exaggerating theunderlying economic trend, the newspaper said. The December reading for west Germany is down almost a full percentagepoint from the level seen only three months before, the data show. The currentslowdown is set to continue, Handelsblatt said, arguing that domestic demandis unlikely to pick up the slack from an expected weakening of foreign demand. German manufacturing orders rose in October, the most recent figuresavailable, but the data show a strong divergence between dynamic foreignorders and weak domestic orders, Handelsblatt noted. In light of the euro'songoing recovery and the global economic slowdown, it is questionablewhether the upward trend in exports will continue, it said. Meanwhile it cannot yet be assumed that domestic demand will take on therole of the economic "locomotive," according to the newspaper. The Handelsblatt economic indicator for west Germany is composed of the Ifomanufacturing sentiment index, orders in the manufacturing and constructionsector, the differential between short-term and long-term interest rates, andretail sales. The indicator for east Germany is based on the Ifo businesssentiment index for the manufacturing and retail sectors, as well as onmanufacturing and construction orders.

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