The German economy took a hit last month when new manufacturing orders fell by 3.7% in May. The picture was far rosier when the totals were compared with the same month a year ago, however. In this scenario orders were up by over 54%.
Mixed bag for German makers
According to provisional results from the German Federal Statistical Office, Destatis, new orders were down by a seasonally and calendar-adjusted 3.7% in May, compared with April.
May's foreign orders were down by 6.7%, while new orders from the eurozone fell by 2.3%. Manufacture of capital goods also dropped by 4.6% on April’s figures, while the manufacture of intermediate goods saw orders decline by 3.6%.
It was not all doom and gloom for Berlin – domestic orders rallied by almost 1%, and new orders of consumer goods rose by 3.9%.
Turnover in Germany was 5.4% higher in February 2020, just before the COVID-19 pandemic swept in, than the figures posted for May 2021.
The German chancellery has revised the preliminary outcome for April 2021, earmarking a 2.5% fall in rates.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said of the 3.7% fall in factory orders: “This is a terrible number, even factoring in the significant upward revision to the April data.”
Vistesen added: “Put differently, the inflow of demand in core manufacturing weakened significantly midway through Q2. This isn’t pretty, but wild swings in export orders to non-EZ economies usually mean revert.
“In addition, a slower inflow in new orders isn’t necessarily a big issue for production in the near term with supply-side constraints holding back output, relative to new orders, since the start of that year. We still see scope for production to rise once the supply-side clears.”