🍎 🍕 Less apples, more pizza 🤔 Have you seen Buffett’s portfolio recently?Explore for Free

German industrial orders rise more than expected in September

Published 11/06/2024, 02:09 AM
Updated 11/06/2024, 03:36 AM
© Reuters. FILE PHOTO: Steel rolls are pictured at the plant of German steel company Salzgitter AG in Salzgitter, Germany, March 2, 2020. REUTERS/Fabian Bimmer/File Photo

By Maria Martinez

(Reuters) -German industrial orders rose more than expected in September thanks to large-scale orders such as aircraft, ships, trains and military vehicles, according to data released on Wednesday.

Orders increased by 4.2% on the previous month on a seasonally and calendar adjusted basis, the federal statistics office said.

A Reuters poll of analysts had pointed to a rise of 1.5%.

In principle, this should be a positive signal pointing to a cyclical recovery in foreign trade, said Sebastian Dullien, from the Macroeconomic Policy Institute IMK. But, in reality geopolitical developments were likely to prevent such a turnaround, he added.

"The looming election victory of the Republican Donald Trump in the U.S. threatens German industry with further, potentially severe setbacks in the coming months," Dullien said.

Trump repeatedly announced high tariffs on European products during the election campaign.

Incoming orders could suffer from such tariffs in the medium to long term, said Thomas Gitzel, chief economist at VP Bank.

Domestic orders rose by 3.6% in September on the month and total foreign orders by 4.4%, with new orders from the euro zone increasing by 14.6%. New orders from the rest of the world fell by 1.6%.

"Reforms, above all a reduction in bureaucratic hurdles for new investments, are now urgently needed to help the ailing manufacturing industry," Gitzel said.

When large-scale orders are excluded, new orders were 2.2% higher than in the previous month.

The less volatile three-month on three-month comparison showed total new orders rose by 4.2% in the third quarter compared with the previous quarter, while new orders excluding large-scale orders were down 0.6%.

The statistics office revised the data for August to a 5.4% decline compared with July, a less pronounced slump than the 5.8% previously reported.

"At best, we can speak of a stabilization of orders at a low level," said Ralph Solveen, senior economist at Commerzbank (ETR:CBKG), adding September's figure did not signal a sustainable turnaround.

The HCOB Germany Manufacturing Purchasing Managers' Index rose to 43.0 in October from 40.6 in September, its highest level since July but still far below the 50-point mark that separates contraction from growth.

© Reuters. FILE PHOTO: Steel rolls are pictured at the plant of German steel company Salzgitter AG in Salzgitter, Germany, March 2, 2020. REUTERS/Fabian Bimmer/File Photo

Leading indicators suggest that the underlying trend in new orders and manufacturing remains subdued, said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.

"We can be fairly certain that factory orders dropped sharply in October, assuming a drop in Airbus orders on the month, and this will set the stage for a fall over the fourth quarter as a whole," Vistesen said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.