German factory orders unexpectedly slump in May
By Michele Maatouk
Date: Tuesday 06 Jul 2021
(Sharecast News) - German factory orders unexpectedly slumped in May amid weakness in the auto sector, according to figures released on Tuesday by Destatis.
Factory orders fell 3.7% on the month following a 1.2% increase in April, missing expectations for a 0.9% rise.
On the year, factory orders rose 54.3% in May following an 80.2% jump the month before and versus expectations for a 59.4% increase.
Compared to February 2020, a month before Covid-related restrictions kicked in, order intake in May was 6.2% higher. Compared to May 2020, which was "very badly" affected by the pandemic, order intake rose 54.3%.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "This is a terrible number, even factoring-in the significant upward revision to the April data. The headline was depressed by a 6.7% month-to-month plunge in export orders, mainly due to weakness in demand from non-eurozone economies, down by 9.3%, while new orders to other eurozone economies slipped by 2.3%.
"Domestic orders rose by 0.9%. Across sectors, new orders for intermediate and capital goods slumped by 3.6% and 4.6%, respectively, while demand for consumer goods snapped back, rising by 3.9% after a 2.4% decline at the start of Q2. Usually, big declines in this headline are driven by major orders, but on this occasion they're not to blame.
"New orders fell by 3.7%, excluding major orders, the same as the aggregate headline. Weakness in the auto sector was a key driver."
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