Germany Factory Orders Decline Further On Weak Foreign Demand
The decline in Germany’s factory orders deepened in September due to a sharp fall in foreign demand, data from Destatis showed on Friday.
Factory orders declined by more-than-expected 4.0 percent on a monthly basis, following a 2.0 percent fall in August. This was the biggest fall since March 2022. Orders were forecast to ease 0.5 percent.
Excluding large-scale orders, there was a decrease of 3.9 percent.
The decline in overall orders was driven by the 7.0 percent fall in foreign demand. Demand from the euro area decreased 8.0 percent and that from other countries slid 6.3 percent. On the other hand, domestic orders gained 0.5 percent.
The producers of capital goods recorded a decline of 6.0 percent in September from a month ago. Orders for intermediate goods dropped 3.4 percent. On the other hand, orders for consumer goods went up by 7.2 percent.
Manufacturing orders logged an annual decline of 10.8 percent in September, following a 3.8 percent drop in August.
Further, data showed that manufacturing turnover grew 0.2 percent on month, after a 1.2 percent rise in August. Compared with same month last year, turnover was up 7.7 percent.
In the third quarter, the largest euro area economy grew 0.3 percent, faster than the 0.1 percent rise posted in the second quarter, the preliminary estimates showed on October 28.
“Last week, surprisingly strong GDP growth for the third quarter might have given the impression that the German economy could defy recession,” ING economist Carsten Brzeski said.
However, this year’s order book deflation sends a clear signal that these signs of hope are illusionary, the economist noted. “The long slide into recession continues,” Brzeski added.
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