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 rose by 2.0% between July and August. [2] This growth was driven by orders from outside the eurozone, which expanded sharply by 11.1%. In contrast, there were drops of 2.2% and 2.9% respectively in orders from the eurozone and within Germany. The proportion of large orders was below average.

In the two-month comparison of May/June versus July/August, orders declined by 1.9%. The largest fall was of -3.0% for capital goods (consumer goods: -1.5%; intermediate goods: -0.2%). While the volume of new domestic manufacturing orders fell only slightly, by -0.4%, there was a 5.6% drop in orders from the eurozone and a 1.3% drop in orders from the non-eurozone.

The sharp rise in orders from countries outside Europe shows that German industrial products remain in demand around the world, despite the trade conflicts. In recent months, the level of new orders has been hit by the backlog of type approvals for cars under the new WLTP emissions standard, and as this backlog disappears, the positive cyclical trends in the manufacturing sector are likely to reappear in the fourth quarter. This is also suggested by the continuing extremely high stock of orders and the above-average positive level of business sentiment in the manufacturing sector.

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