German factory orders slump in March
By Michele Maatouk
Date: Thursday 05 May 2022
(Sharecast News) - German factory orders fell more than expected in March as foreign orders slid, with the war in Ukraine taking its toll, according to figures released on Thursday by Destatis.
Orders slumped 4.7% on the month following a revised 0.8% decline in February, missing expectations for a more modest 1.1% decline. On the year, factory orders were down 3.1% in March following a revised 4.3% increase the month before.
Foreign orders tumbled 6.7% on the month, while new orders from the non-euro area declined 13.2%. Orders from the eurozone rose by 5.6% and domestic orders edged down 1.8% on the previous month.
The producers of capital goods recorded an 8.3% drop. Producers of intermediate goods saw new orders in March fall 1.5% on the month, while consumer goods manufacturers saw a 6.4% jump.
"In these politically and economically difficult times, the decrease also shows a growing reluctance to invest," Destatis said.
Carsten Brzeski, global head of macro at ING, said: "German manufacturing orders plunged in March, adding further evidence as to how the war in Ukraine is weighing on the German and European economy."
He did point out however that the drop in orders was "still far away from the collapse of orders seen at the start of the first pandemic-driven lockdowns in spring 2020".
"Back then, orders dropped by 40% within two months. The decrease in new orders in manufacturing was mainly due to orders abroad.
"German order books were richly filled at the turn of the year but have started to weaken since then. The war in Ukraine and the new supply chain frictions in China will add more pressure to orders and consequently, the entire economy in the coming months."
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