German Industrial Orders Show Modest Growth in November, Falling Short of Expectations

Data from the federal statistics office on Monday revealed that German industrial orders experienced a lower-than-expected increase in November, indicating weakened demand in the sector. On a seasonally and calendar-adjusted basis, industrial orders saw a month-on-month rise of 0.3%, falling short of the forecasted 1% increase in a Reuters poll of analysts.

The breakdown of the data showed a mixed picture, with domestic orders showing a positive trend with a 1.4% increase, while foreign orders saw a decline of 0.4%. Orders from the euro zone experienced a sharper drop, decreasing by 1.9%, while orders from the rest of the world registered a modest increase of 0.6%.

A less volatile three-month comparison revealed that new orders were 4.5% lower in the period from September to November compared to the previous three months. The statistics office revised October data to reflect a 3.8% decline in industrial orders, slightly worse than the initially reported 3.7% drop.

Breaking down the data further, new orders excluding large-scale orders decreased by 0.6% in November compared to the previous month. Joerg Kraemer, chief economist at Commerzbank, noted that companies were unable to absorb the weaker demand due to low order backlogs resulting from the processing of unfilled orders during the coronavirus crisis, suggesting a potential further decline in industrial production.

The outlook for November industrial production data, to be published on Tuesday, remains uncertain in the face of these challenges.