Mixed signals are coming from German industry: While new orders have recently stagnated, exports rose more strongly in November than they have in over a year and a half.
Industry in Germany received slightly more orders again in November. Orders rose by 0.3 percent compared to the previous month, as the Federal Statistical Office announced today. In October there was a slump of 3.8 percent. Despite the slight recovery, development was significantly weaker than analysts had predicted, who on average had expected growth to be three times as strong.
According to the information, more orders were received in November in most sectors of the economy. Mainly the heavily weighted areas of motor vehicles, chemical products, electrical equipment and mechanical engineering recorded significantly higher orders than in October. On the other hand, there was a major setback in volatile other vehicle construction after the recent strong increase.
Significantly more orders from domestically
Accordingly, experts were cautious today: “The prospects for the German economy remain bleak. The global economic environment is weak and the environment for increasing investments is unfavorable,” said Thomas Gitzel, chief economist at VP Bank: “The high interest rates contribute to this, But the excessive bureaucracy also spoils the mood to invest more money in the company.”
After all, domestic orders from German industry rose by 1.4 percent in November compared to the previous month. On the other hand, foreign demand fell by 0.4 percent. Business with the other euro countries fell by 1.9 percent. “While there have recently been signs of a stabilization in incoming orders from domestically in key areas, weak foreign demand, particularly from the euro area, continues to weigh on the industrial economy,” commented the Federal Ministry of Economics on the development.
Exports with the largest increase since February 2022
While new orders almost stagnated and sales even shrank, German industry exports rose more strongly in November than they had in over a year and a half. Exports increased by 3.7 percent compared to the previous month to 131.2 billion euros due to better demand from the EU and China, as the Federal Statistical Office also announced today. This is the biggest increase since February 2022.
“The strong increase in exports is a bang, but hardly a relief,” said the chief economist at Hauck Aufhäuser Lamp Privatbank, Alexander Krüger. The order development signals that no major jumps are to be expected.
No positive outlook
Export business with EU member states increased by 5.4 percent to 71.5 billion euros in November. The USA remained the most important buyer of goods “Made in Germany”, although exports there fell by 1.4 percent to 13.4 billion euros this time. Exports to China, on the other hand, increased by 3.1 percent to 8.1 billion euros.
Nevertheless, exporters are not very optimistic about the new year. The barometer for their export expectations fell by 2.6 points to minus 6.7 points in December, as the Ifo Institute found in its company survey. “Companies see little positive prospects for the beginning of the year,” said the head of the ifo surveys, Klaus Wohlrabe.