“German Manufacturing Sector Orders Declining: Insights and Analysis”

2023-05-05 09:41:36

The German government is optimistic despite this declining indicator, betting on growth of 0.4% this year.

By Le Figaro with AFP

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The manufacturing sector is a pillar of the German economy. DAVID HECKER / AFP

Orders placed at german industry relapsed heavily in March over one month, by 10.7%, unheard of since the trough of the Covid-19 which feeds recession fears for Europe’s leading economy. This key indicator for the manufacturing sector, a pillar of the German economy, suffered a decline after two consecutive months of increases, including February which had increased by +4.5%, according to figures published Friday by the national institute. statistics, Destatis.

It is “the largest (monthly) drop since the peak of the Covid-19 pandemic in April 2020“Commented the Ministry of the Economy in a press release, referring to orders taken”very volatile“. The negative development in March “observed in most sectors of the manufacturing industry“, according to Destatis.

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These data are “a bolt from the bluecommented economist Jens-Oliver Niklasch of LBBW bank. He sees “a real sign of recessionemerge after a good start to the year for German industry. The decline is particularly strong in motor vehicle manufacturing and spare parts (-12.2% over one month) and that of other vehicles including military, which fell by more than 47% in seasonally adjusted data, after a jump of 55% a month earlier.

Overall orders for capital goods fell by 14.1% and by 7.5% for intermediate goods, against a timid increase of 1.2% on the consumer goods side. Orders from abroad fell by 13.3% and those from Germany by 6.8%. “After a weak last quarter of 2022 and a volatile start to 2023, an economic recovery is expected for the rest of the year“, according to the Ministry of the Economy.

GDP barely avoided recession at the start of the year, with zero growth compared to the 4th quarter of 2022, after having fallen by -0.5% from October to December. A technical recession is defined by two consecutive quarters of decline in activity. The German government is globally expecting growth of 0.4% for the whole of 2023.

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