Germany – Orders bottoming out?

At first glance, incoming orders in German manufacturing appear to have turned around. They were 2.9% higher in July than in June, having already risen by 4.6% in the previous month. However, the increase is solely due to many big ticket orders – particularly in the area of “other vehicle construction” (aircraft, ships, military equipment, etc.) – which are usually processed with a considerable delay and over a longer period of time and therefore have little impact on the short-term economic development. If these are excluded, industrial companies even recorded a slight decline in orders of 0.4%.

It is therefore not yet possible to speak of a sustained turnaround in orders for the better. At least incoming orders have stabilized for some time. However, the recent weakening of sentiment indicators is a reminder to be cautious. Accorting to them, a further decline in orders is currently more likely than a rapid turnaround for the better. Production is more likely to fall again in the third quarter and thus contribute to the German economy once again barely growing.

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