German industrial orders post surprise rise in December
FILE PHOTO: Tyres are seen at a retreating station before the visit of German Chancellor Olaf Scholz at the Continental plant in Hanover, Germany April 17, 2023. REUTERS/Fabian Bimmer/File Photo
By Maria Martinez
BERLIN (Reuters) -German industrial orders unexpectedly jumped in December, posting their highest month-on-month increase in more than three years, driven by «an exceptionally» high number of aircraft orders, the federal statistics office said on Tuesday.
Orders rose by 8.9% on the previous month on a seasonally and calendar adjusted basis, the largest increase since June 2020. A Reuters poll of analysts had expected industrial orders to remain flat.
Plane orders boosted the «other vehicle construction» category, which includes aircraft, ships and trains and saw an increase in orders of 110.9% on the month.
Large orders in the manufacture of metal products (+18.0%) and manufacture of electrical equipment (+38.7%) also had a positive impact on the overall result.
The lack of orders in manufacturing is increasingly becoming a burden on the German economy, the Ifo Institute said on Monday, and economists warned that Tuesday’s data did not change that.
Commerzbank (ETR:CBKG) senior economist Ralph Solveen said the unusually high number of big ticket orders would have little effect on production in the shorter term, and if these are factored out, the volume of orders actually fell by 2.2%.
«This shows once again that a turn for the better is not in sight for the German economy,» Solveen said.
Incoming orders fell in the important areas of the automotive industry (-14.7%), mechanical engineering (-5.3%) and the chemical industry (-3.7%), the statistics office said.
In a less volatile three-month comparison, industrial orders from October to December 2023 were 0.1% higher than in the previous three months.
In December, domestic orders rose by 9.4% on the month. Foreign orders rose by 8.5%, with orders from the euro zone increasing by 34.5% and orders from outside the euro zone falling by 7.5%.
For 2023 as a whole, calendar-adjusted industrial orders fell by 5.9% compared with the previous year.