German Factory Orders Fall Most In Over A Year On Weak Demand

Business

Germany’s factory orders declined the most in more than a year in November on a steep fall in foreign demand that was in sync with the weaker exports data released earlier, while retail sales rebounded despite high inflation, offering a mixed picture of the biggest euro area economy.

Factory orders plunged 5.3 percent in November from October, data from Destatis showed Friday. This was the biggest decline since October 2021, when orders slid 6.1 percent.

Moreover, the fall was in contrast to the revised 0.6 percent increase in October and far exceeded economists’ forecast of -0.5 percent.

The monthly decline was reflective of the 8.1 percent drop in foreign orders. New orders from the euro area slid 10.3 percent and that from other countries sank 6.8 percent. At the same time, domestic orders posted a moderate decrease of 1.1 percent.

Excluding large-scale orders, new orders declined 2.9 percent in November.

Producers of capital goods reported a sharp 8.5 percent fall, mirroring the development in the machine construction and other vehicle manufacturing. Intermediate goods orders dropped 0.9 percent and consumer goods orders decreased 0.7 percent.

With the 11.0 percent annual fall, new orders reached its lowest since July 2020.

Official data also showed that manufacturing turnover grew 2.1 percent on a monthly basis in November, in contrast to the revised 0.4 percent fall in October.

Separate data from Destatis showed that retail sales rebounded 1.1 percent month-on-month in November, reversing a 2.8 percent fall in October. The increase was slightly better than economists’ forecast of 1.0 percent.

In the whole year of 2022, retail sales decreased 0.3 percent in real terms, following a 0.8 percent increase in annual turnover in 2021, which was the highest since the start of the time series.

Data released on Thursday showed that exports posted an unexpected 0.3 percent fall in November on weaker global demand. At the same time, imports registered a sharper 3.3 percent decrease.

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