2024-03-07 14:53:25
German industry is struggling with problems. Compared to the previous month, new business fell by more than 11 percent.
German industry suffered a massive drop in orders in January. New business fell by 11.3 percent compared to the previous month, as the Federal Statistical Office (Destatis) announced on Thursday. Economists surveyed by the Reuters news agency had previously only expected a decline of 6 percent.
The pendulum thus swung back again after the industry had recorded a strong increase in orders in December with an upwardly revised 12 percent. The sharp decline at the beginning of the year was due to the high volume of large orders in December, the statisticians explained. In January, large orders were back at average levels.
More favorable development in a three-month comparison
In a less fluctuating three-month comparison, the development is more favorable: up to January, incoming orders rose by 2.3 percent compared to the previous three months. In a two-month comparison, orders even increased by 5.9 percent, according to the Federal Ministry of Economics in Berlin. “Sentiment indicators such as the Ifo business climate index or the purchasing managers’ index suggest that the industrial economy will stabilize in the first quarter,” explained the ministry.
However, the figures at the start of the year were consistently weak: a good 11 percent fewer orders came from both domestic and foreign countries. The setback was particularly noticeable, with around a quarter in the Eurozone. There were fewer orders for intermediate goods and consumer goods, but orders for capital goods fell most significantly. The rebound effect from large orders may have had the strongest effect here.
“Looks like a bitter slump”
“This looks like a severe slump. However, you also have to take into account the massive upward revision for December. Large orders and late reports were to blame for both figures,” analyzes Jens-Oliver Niklasch from LBBW (Landesbank Baden-Württemberg). The statisticians from Wiesbaden rightly pointed out that the situation was more positive in a three-month comparison. “All in all, not a bad number once you get over the initial shock of the January minus. But not yet good enough to reverse the downward trend of the last few quarters,” says Niklasch.
“Instead of smearing production, orders are smearing again,” explained chief economist Alexander Krüger (Hauck Aufhäuser Lamp Private Bank). “Because of the fluctuating large orders, orders are currently zigzagging,” he continued.