Worker in a factory symbolize the development of new manufacturing orders; Source: Monty Rakusen/cultura/Corbis Enlarge

© Monty Rakusen/cultura/Corbis

According to the Federal Statistical Office [1], new manufacturing orders rose slightly between January and February, by 0.3%. [2] This rise is primarily due to new orders of capital goods (+0.9%), whilst the volume of new orders of intermediate and consumer goods dropped (by -0.5% and -2.4% respectively). Excluding large orders, new orders dropped by 0.7%.

The upward trend in new orders has weakened considerably. The two-month comparison shows a decline in new orders of 2.1%. However, the three-month comparison – which is more robust – continues to point upwards (+0.8%), even though growth has clearly slowed compared with the previous months. This is primarily due to domestic clients becoming more restrained in placing new orders. The main demand-side stimulus continues to come from outside Germany, and particularly from the eurozone.

Despite this slow start to the year, the trend for new orders should continue to point upwards. As the global economy continues to pick up speed, the demand for industrial goods from Germany should remain high. In addition to this, the strong order activity seen particularly in the second half of 2017 should also lead to further growth in industrial production in the coming months.

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[1] Press release by the Federal Statistical Office of 5 April 2018.
[2] All figures are based on provisional data and have been adjusted for price, calendar day and seasonal factors (X13 JDemetra+ procedure).