German industrial orders see surprise slump in late 2019
German factory recovery in question after orders fall unexpectedly
German industrial orders tumbled at their fastest pace in 10 months at the end of last year, missing market expectations, and casting some doubt that recent evidence may be pointing to a sustained improvement.
Industrial orders fell by 2.1 per cent on a monthly basis in December, against market expectations for a rise of 0.6 per cent, and after a downwardly revised 0.8 per cent fall in November, according to data from the Federal Statistics Office.
This was the worst reading since last February, largely due to a 4.5-per cent drop in foreign orders. New orders from the euro zone, Germany’s biggest export market, dropped 13.9 per cent.
Orders for big-ticket capital goods fell by 3.9 per cent, while consumer items dropped 3.8 per cent. Orders for intermediate goods rose 1.4 per cent, the data showed.
“The fact remains that orders have fallen in four of the last six months and eight of the last 12, and as much as there has been a welcome recovery in domestic orders in the past two months, it is still debatable whether the low point has been reached, let alone talk about a recovery - however modest,” ADM global economist Marc Ostwald said in a daily note.
There has been more optimism recently over the state of the German factory sector - the euro zone’s largest.
A monthly report from IHS Markit earlier this week showed German manufacturing remained in recession, but improved more in January than that in any other euro zone economy, thanks to a more stable political and economic backdrop.
Euro zone manufacturing activity improves modestly in January