In June, German industry surprisingly recorded the strongest increase in orders in three years. Orders increased by 7.0 percent compared to the previous month. The prospects are still cautious.
Thanks to numerous large orders, German industry once again received significantly more orders in June. The Federal Statistical Office announced today in Wiesbaden that orders had risen by 7.0 percent in a monthly comparison.
Analysts were surprised by the development. They had expected a setback and had assumed an average decline of 2.0 percent, after May had seen unusually strong growth of 6.2 percent.
Excluding large orders, orders decline
As in May, large-volume orders, which can fluctuate significantly over time, provided the impetus. The Federal Office also announced that incoming orders, excluding major orders, fell by 2.6 percent in June.
In the period from April to June, incoming orders were almost unchanged compared to the three months before, as the Federal Office further announced. The slump in orders in German industry of almost eleven percent in March was thus compensated.
Experts urge caution
Despite the positive numbers, experts urge caution with the prospects. A statement from the Federal Ministry of Economics states that incoming orders are “characterised by strong fluctuations and special effects due to large orders”. The prospects for industrial activity remain subdued in view of the gloomy business climate and the weak global economy.
Economists also agree with this assessment. “Once again a big surprise, but on the positive side,” comments LBBW economist Jens-Oliver Niklasch on the latest figures. However, he remains on the side of the economic pessimists, albeit with a little less conviction than before. “The trend in orders is still pointing downwards,” commented Commerzbank chief economist Jörg Krämer on the current order figures. “I still expect the German economy to contract in the second half of the year.”
domestic demand weakens, foreign demand attracts
Domestic orders bucked the general trend in June, falling 2.0 percent, while overseas demand rose 13.5 percent. Demand from the euro zone even increased by 27.2 percent.
The so-called other vehicle construction had a particularly positive influence with an increase of 89.2 percent. These include the construction of ships, rail vehicles, aircraft and spacecraft, and military vehicles. There was also strong growth in mechanical engineering at 5.1 percent, while the manufacturers of motor vehicles and motor vehicle parts reported a minus of 7.3 percent.