Workers at a plant stand for new orders in the manufacturing sector

© Monty Rakusen/cultura/Corbis

According to the Federal Statistical Office [1], new manufacturing orders fell between June and July by 0.9%. [2] Domestic orders rose by 2.4%. There were drops of 2.7% and 4.0% respectively in orders from the eurozone and the non-eurozone. The proportion of large orders was slightly below average.

In the two-month comparison of June/July versus April/May, orders declined by 3.1%. The main factor behind this was orders for capital goods, which fell by 4.1%. While the volume of new domestic manufacturing orders rose by 0.7%, there was a 2.0% drop in orders from the eurozone and an 8.0% drop in orders from the non-eurozone.

Following a highly dynamic second half of 2017, new orders in the manufacturing sector have weakened significantly since the beginning of the year. A role here has probably been played by the global uncertainties caused by trade conflicts. Further to this, there are temporary logjams in the approval of vehicles under the new WLTP test procedure for cars, which entered into force in the EU on 1 September. The decline in orders for cars and car parts accounted for roughly 2 percentage points of the 3.1% drop seen across the manufacturing sector in June/July. Some of this is likely to be made up again in future. The order reserves in the manufacturing sector remain very high, and business sentiment actually improved again recently.

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[1] Press release by the Federal Statistical Office of 6 September 2018.
[2] All figures are based on provisional data and have been adjusted for price, calendar day and seasonal factors (X13 JDemetra+ procedure).