Germany: no sign of a manufacturing recovery

Chart of the Week

German factory orders, which were boosted by one-off factors from sectors such as aviation in December, fell back sharply in January. The monthly decline of 11.3% in January came in stark contrast to the 12% increase posted in December. Year on year, orders fell 6.0%.

A similar picture emerges from less volatile data that strip out one-off items, where capital goods orders in particular are pointing downwards. Consumer goods orders have tumbled 8% over the last two months, having held up well previously.


A geographical breakdown of data excluding volatile items reveals weakness in domestic orders and in foreign orders from outside the eurozone. Bucking the trend are orders from within the eurozone, which are proving more resilient.

Although a breakdown of orders from outside the eurozone is not available, a parallel may be drawn with the clear decline in export volumes to China, following the upsurge in 2020.

The new orders component of the manufacturing PMI index, which had rebounded to 44.3 in January from 32.6 in August, fell back to 40.7 in February. With the European Commission’s indicators also signalling ongoing weakness, a German manufacturing recovery still seems a long way off.


Written on March 08, 2024. This is not an investment advice. Opinions subject to change.

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