The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019

German Industrial Orders Drop In July


FRANKFURT (AFP) – German industrial orders, a key measure of demand for German-made goods, fell unexpectedly sharply in July, data showed on Thursday, but analysts believe the overall underlying trend remains positive.

After a large number of big ticket orders had boosted industrial orders the previous month, the volume of orders fell in July, mainly because of a disproportionately low number of bulk orders, the economy ministry said in a statement.

Industrial orders dropped by 2.7 percent overall in July compared with June after an increase of 5.0 percent the previous month.

Analysts had been projecting a shallower drop of about 1.3 percent in July.

The ministry said that domestic orders slipped by 0.3 percent and export orders were down by as much as 4.5 percent.

By sector, orders for capital goods were down 5.1 percent and orders for consumer goods declined by 1.0 percent.

By contrast, orders for semi-finished goods rose by 0.8 percent.

However, taking June and July combined to iron out short-term fluctuations, the data were more positive.

Overall orders were up 3.3 percent in the two-month period, with domestic orders rising by 2.4 percent and exports orders up by 3.9 percent, the ministry calculated.

Analysts said they were also unfazed by the bigger-than-expected drop in orders in July.

“Monthly manufacturing orders have been rather volatile over recent months due to large swings in bulk orders for transport equipment,” said UniCredit analyst Alexander Koch.

“Today’s release is no exception, as the downward adjustment was mainly a counter-reaction to the preceding jump in this category in June and, as the ministry reported, below-average bulk orders in July.”

Indeed, the latest business survey results indicate a further acceleration in the underlying order dynamics during the third quarter, Koch said.

Christian Schulz at Berenberg Bank noted that the German economy returned to growth in the second quarter of this year, “fuelled by resilient consumers and a swing in investment.

“Both look set to continue according to survey data,” Schulz said.

Annalisa Piazza at Newedge Strategy also pointed out that German factory orders “are extremely volatile and often see considerable revisions.

“As such, we would not read much out of today’s decline in orders. Indeed, total orders remain on a modest upward trend, consistent with the idea of progressive improvement of the German factory sector,” she said.

“All in all, the decline in German orders seem to have been a one-off and we would not see it as a sign that factory activity is losing momentum,” Piazza concluded.

Photo Credit: AFP/Odd Andersen


Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

Rev. Al Sharpton, near left, with members of Tyre Nichols' family

Youtube Screenshot

Black Lives Matter.

Now, can everyone understand the desperate, defiant power of those three words? Can all those who tried to act as though they didn’t get why the phrase needed to be said — over and over — finally stop pretending?

Keep reading...Show less

Vladimir Putin

Youtube Screenshot

Militarily and politically as well as economically, the war in Ukraine has been a major drain on Russia. President Vladimir Putin and his allies in the Kremlin were hoping for a quick, easy invasion, but Ukrainian forces have been much more skillful fighters than Putin anticipated.

Moreover, the invasion of Ukraine has had an unintended consequence: the expansion of the North Atlantic Treaty Organization (NATO). Sweden and Finland, for many years, stayed out of NATO; in 2022, they applied for membership. And U.S. President Joe Biden, in contrast to former President Donald Trump’s anti-NATO views, has welcomed NATO’s expansion.

Keep reading...Show less
{{ }}