In October, Germany experienced a decline in manufacturing new orders, though at a milder rate than anticipated, largely due to weak domestic demand. However, a significant upward revision in September’s figures was reported, driven by a substantial order in the shipbuilding sector. This information was disclosed by Destatis, the statistical office, on Thursday.
Seasonally and calendar-adjusted figures revealed a 1.5% decrease in orders from the previous month, which was less steep than the 2.0% decline predicted by economists. Notably, when excluding significant orders, factory orders inched up by 0.1% in October.
September’s new orders were revised to reflect a 7.2% increase, surpassing the initial report of a 4.2% rise. This adjustment was due to a late-reported large-scale shipbuilding order, according to Destatis.
The influx of large-scale ship manufacturing orders also had a prominent effect on October's overall results, as per Destatis.
Commerzbank economist Ralph Solveen observed that core orders, excluding substantial ones, remain stagnant, indicating no signs of a manufacturing sector rebound. He highlighted, "A significant portion of companies in the Ifo survey describe their order backlogs as insufficient, and sentiment indicators suggest no anticipated rapid improvement here."
"As such, there is minimal incentive for companies to swiftly increase production. This argues against any immediate recovery of the German economy, which is expected to at best stagnate during the winter half-year," Solveen added.
In October, domestic orders fell by 5.3%. However, foreign orders saw a 0.8% rise, with a 6.3% increase in orders from outside the euro area partly balancing a 7.6% drop in demand from within the single currency bloc.
Regarding industrial sectors, machinery and equipment manufacturing observed a 7.6% decrease in orders, while the automotive industry saw demand drop by 3.7%, according to Destatis data.
Conversely, demand surged by 10.2% for basic metals and 8.0% for computer, electronic, and optical products. Intermediate goods orders grew by 0.9%, and demand for consumer goods rose by 4.2%. Meanwhile, orders for capital goods production experienced a 3.6% decline.
