Hanover, Germany - German Chancellor Angela Merkel said she was picking up signs of hope Monday as she toured booths at the Hanover Fair, a trade show for the world engineering and machinery industry.

"Perhaps the Hanover Fair is a tiny sign that it is bottoming out," said Merkel in reference to the worldwide recession.

VDMA, Germany's federation of machinery makers, said Monday that world sales of machinery were likely to decline 10 per cent this year.

Han Seung-Soo, prime minister of South Korea, which is "partner nation" at this year's fair, said, "It shows how widespread the hope is that this unprecedented crisis can be overcome."

Han had helped inaugurate the fair the previous evening, and he and Merkel made a joint tour of highlights on Monday, the first working day of the annual event which continues until Friday.

"Companies want to emerge strengthened from this crisis," said Merkel after speaking to a series of German and South Korean sales executives. "That is the climate that I sensed here today."

She said the message was that innovation was a winning strategy. (dpa)