Germany Factory Orders Growth Eases On Weak Domestic Demand
September 04 2020 - 2:33AM
RTTF2
Germany's factory orders growth eased more than expected in July
due to the double-digit fall in domestic demand, data from Destatis
revealed Friday.
Factory orders increased 2.8 percent on a monthly basis, much
slower than the 28.8 percent rise in June and economists' forecast
of 5 percent increase.
New orders increased for the third straight month in July after
posting a record contraction at the height of the covid-19 lockdown
in April.
Domestic orders fell 10.2 percent in July, while foreign orders
grew 14.4 percent on the previous month.
New orders from the euro area went up 7.3 percent and demand
from other countries increased by 19.2 percent compared with
June.
The economy ministry said after the initial recovery in May and
the strong recovery in June, the process of catching up in new
orders in manufacturing slowed in July.
It is likely to continue in the next few months, as indicated by
the lower number of short-time working and the improved business
expectations of entrepreneurs, the ministry noted.
Even though the sharp divergence between domestic and foreign
orders makes it hard to derive a clear trend from today's data,
Carsten Brzeski, an ING economist said. The hopes for a strong
rebound stay alive, as much as the fears of a weak recovery after
the initial rebound.
Orders for capital goods fell slightly by 0.4 percent, while
that for consumer goods gained 0.2 percent. Intermediate goods
demand grew by 9.5 percent.
New orders in the automotive industry increased 8.5 percent on
the previous month. However, new orders were still 2.4 percent
lower than in February 2020.
On a yearly basis, overall factory orders declined 7.3 percent
in July, following a 10.6 percent decrease seen in June.
Data showed that manufacturing turnover climbed 5.2 percent on
month, but slower than the 13.2 percent increase in June.
The Purchasing Managers' survey from IHS Markit showed that the
manufacturing sector growth accelerated to a 22-month high in
August. According to Markit, new orders increased in August
underpinned by both domestic demand and sustained growth in export
sales.
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