2024-08-07 15:18:54
German industry achieved a surprising increase in orders in June. Nevertheless, the Federal Ministry of Economics warns against too much optimism.
In June, German industry achieved its first increase in orders this year amid concerns about a recession. Orders grew surprisingly strongly by 3.9 percent compared to the previous month, the Federal Statistical Office announced on Tuesday. Economists surveyed by the Reuters news agency, however, had only expected an increase of 0.5 percent, after five consecutive declines. Nevertheless, orders in the second quarter were 1.4 percent lower than in the first three months of the year.
The Federal Ministry of Economics therefore warned against too much optimism. “However, given the continued subdued mood in companies and the still weak foreign demand, a broader recovery in the industrial economy is not likely for the time being,” it said. The business climate in industry had deteriorated significantly in July, as the Ifo Institute found in its company survey. “In particular, the assessments of the current situation were considerably worse,” says Ifo President Clemens Fuest. Expectations have also become more subdued.
“The positive development of incoming orders in the manufacturing sector in June 2024 is due in particular to the significant increase in the automotive industry,” emphasized the statistics office. Here, there was an increase of 9.3 percent compared to the previous month. The increases in the manufacture of metal products (+9.8 percent) and in other vehicle construction such as aircraft, ships and trains (+11.7 percent) also had a positive effect. In contrast, demand from manufacturers of data processing equipment, electronic and optical products fell by 7.9 percent.
While domestic orders rose by 9.2 percent in June, those from abroad only increased by 0.4 percent. New business with countries outside the euro zone grew by 0.9 percent, while business with the monetary union shrank by 0.3 percent. Without the large orders, which often fluctuate greatly, orders increased by a total of 3.3 percent.