German Factory Order Growth Slows Sharply

Germany’s manufacturing new orders growth slowed more than expected in September as foreign demand remained subdued and the outlook is not promising with the return of lockdown amid a resurgence in the coronavirus infections.

Factory orders rose a seasonally and calendar adjusted 0.5 percent month-on-month in September, figures from the statistical office Destatis showed on Thursday. Economists had forecast a 2 percent increase.

The pace of growth slowed sharply from August’s 4.9 percent, which was revised up from 4.5 percent.

The latest growth figure was the weakest outcome since April, when orders plunged 26 percent amid the lockdown to fight the Covid-19 pandemic.

Excluding major orders, real new orders in manufacturing rose 4.5 percent from the previous month.

“After the first strong recovery after the lockdown in April, the industry is still fighting its way out of the crisis,” the economy ministry said.

Factory orders almost reached their level of the fourth quarter of 2019, 99.4 percent, before the outbreak of the pandemic, the ministry noted.

On a year-on-year basis, factory orders decreased a calendar adjusted 1.9 percent in September after a 1.7 percent fall in August.

In the third quarter, manufacturing orders grew 29.1 percent from the previous quarter.

Compared with February, the month before lockdown restrictions were imposed due to the coronavirus pandemic in Germany, new orders in September were 2.6 percent lower, Destatis said.

Amid a resurgence in the Covid-19 infections, Germany and France announced a fresh lockdown last week.

The European Central Bank has projected that economic activity is set to slow significantly in the fourth quarter. The central bank has also signaled a fresh round of stimulus in December.

The economic recovery process in September was broad-based and was driven by domestic and international demand, the economy ministry said.

In September, domestic orders increased 2.3 percent monthly, while foreign orders decreased 0.8 percent. Demand from the euro area dropped 6.0 percent, and new orders from other countries grew 2.7 percent.

Orders for intermediate goods grew 4.0 percent monthly, while those for capital goods decreased 2.0 percent. Consumer goods orders rose 2.6 percent.

Destatis also reported that manufacturing turnover rose 1.1 percent month-on-month in September. Compared with February, turnover was 8.9 percent lower. In August, turnover shrunk 0.1 percent.

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