Germany's Factory Orders Growth Tops Expectations

germanyfactoryorders sept06 06may21 lt

Germany's factory orders growth accelerated more than expected in March underpinned by both foreign and domestic demand, data from Destatis revealed on Thursday.

Factory orders increased 3 percent month-on-month in March, faster than the revised 1.4 percent increase seen in February. Orders were expected to climb 1.7 percent.

Excluding major orders, real new orders in manufacturing were 1.6 percent higher than in the previous month.

Domestic orders were up 4.9 percent and foreign orders increased 1.6 percent in March. Orders from the euro area rose 0.7 percent, and that from other countries gained 2.2 percent compared with February.

Among major segments, manufacturers of intermediate goods reported an increase of 2.8 percent. Orders for capital goods gained 2.5 percent and demand for consumer goods surged 8.5 percent.

On a yearly basis, new order growth increased sharply to 27.8 percent from 5.8 percent in the previous month.

Turnover in manufacturing climbed 2 percent on month, reversing a 1.8 percent fall in February.

German industry had a weak start to the year due to supply chain disruptions and the Christmas break, Carsten Brzeski, an ING economist, said. More structurally, German industry is still on a catching up track and a sharp rebound is expected soon.

Elsewhere, survey results from IHS Markit showed that Germany's construction sector contracted further due to the reduction in demand for new building work.

The survey showed unprecedented delays in the receipt of building materials and products, alongside a sharp acceleration in the rate of input cost inflation to a survey-record high.

The construction Purchasing Managers' Index fell to 46.2 in April from 47.5 in the previous month.

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