FX.co ★ German Factory Orders Fall More than Expected

German factory orders experienced a decline of 1.4% in May 2025 compared to the previous month, falling short of the anticipated 0.1% decrease. This marks a turnaround from the upwardly revised 1.6% increase observed in April and represents the first decline in three months. The drop was significantly influenced by a substantial 17.7% decrease in orders for computer, electronic, and optical products, following a surge in large-scale orders earlier in April. Additionally, demand for electrical equipment decreased by 6.2%, and basic metals saw a 5.1% reduction. Conversely, orders for fabricated metal products rose by 18.2%, and those for other transport equipment increased by 6.8%. Capital goods orders fell by 4.1%, and intermediate goods decreased by 3.4%, although consumer goods experienced a rise of 3.1%. Domestically, orders plummeted by 7.8%, counterbalancing a 2.9% increase in international demand, driven by a notable 9.0% surge in orders from outside the euro area, despite a 6.5% drop from within the eurozone. Excluding large-scale orders, total demand slipped by 3.1%. When considering a less volatile three-month perspective, factory orders grew by 2.1% from March to May 2025, supported to some extent by the 90-day trade truce.