Orders from German industry fell more sharply in May than since the first lockdown in 2020. The companies collected 3.7 percent fewer orders than in the previous month due to weak foreign demand, as the Federal Ministry of Economics announced on Tuesday. New business thus fell for the first time this year.
Economists, on the other hand, had expected an increase of 1.0 percent. However, the April value has been revised upwards sharply: It has been corrected upwards from minus 0.2 percent to plus 1.2 percent, announced the Federal Ministry of Economics.
The reason for the decline in May may also be the lack of material, said chief economist Thomas Gitzel from VP Bank. “The industry still has good quarters ahead of it, but the special demand is probably slowly ending now.” Containing the pandemic will also lead to normalization.
“Overall, incoming orders are still above the pre-crisis level,” said the Federal Ministry of Economics. Measured on February 2020, the month before the start of the restrictions in the wake of the corona pandemic, the orders are now 6.2 percent higher. Compared to the lockdown month of May 2020, they increased by 54.3 percent.
Domestic orders rose 0.9 percent on the previous month. However, the international business collapsed by 6.7 percent. Orders from countries outside the euro zone fell sharply by 9.3 percent, while export orders from the currency area only fell by 2.3 percent.
For example, capital goods such as machines and vehicles were less in demand: Here, demand fell by a total of 4.6 percent, while that for consumer goods rose by 3.9 percent. Manufacturers of intermediate goods reported a decrease of 3.6 percent.
The order books are still well filled, said economist Gitzel. “You don’t have to be scared and afraid.” In the past twelve months there have only been two declines. “This means that the order backlog has been at an all-time high since the time series was launched in 2015.” The range of the current order backlog is seven months, it said.
The German economy had shrunk by 1.8 percent in the lockdown at the beginning of 2021. In the quarter just ended, the economy is likely to have recovered noticeably thanks to openings and easing. For the current summer, economists are also expecting noticeable growth, even if delivery bottlenecks, for example for preliminary products, are slowing down many industrial companies.