Commodities Economy News

Germany: 3.7% decline for industrial orders in May

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In May, orders placed with German companies fell by 3.7%, weighed down by a sharp decline abroad, according to figures released Tuesday.

german industry
The problem remains that of meeting this demand when the industry has been disrupted for months by a shortage of components, especially microchips, along the supply chain.

In the meantime, the industry has been disrupted for months by a shortage of components, especially microchips, along the supply chain.

The indicator is down for the first time since the beginning of the year, but orders remain above their level before the Covid-19 crisis, according to the Destatis statistical institute.

Factset polled analysts who expected growth of 0.8% over one month, yet this statistic defies that prediction.

As an element of explanation, Destatis corrected its estimate for April to + 1.2% after initially reporting a decline of 0.2% in total orders.

With 54.3 percent jump over one year, the jump reflects the first wave of the pandemic in May of 2020, when much of the first European economy was at a standstill.

International orders in decline
May was a poor month for the international sector, with euro zone orders falling by 2.3% and those from the rest of the world by 9.3%.

The new orders for intermediate goods and capital goods decreased by 3.6% and 4.6%, respectively, while consumer goods rose by 3.9%.

Carsten Brzeski, economist at ING, says that the underperformance of May is disappointing but not alarming.

“Order books are overflowing, and reducing backlogs is a greater concern than acquiring new orders,” he says.

The morale of German bosses measured by the IFO reached a new zenith in June, and after a plunge in the eurozone economy of 4.7% in 2020, Berlin anticipates a GDP growth of 3.5% in 2019.

For MetaNews.

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Jonathan Hobbs

Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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