German Industry Orders Fall for Fifth Consecutive Month – teleSUR English

German automotive manufacturer. Photo: X/ @DavidSocial1976

July 4, 2024 Hour: 7:42 am

The decrease was attributed to a noticeable drop in orders from abroad, particularly from countries outside the euro area.

On Thursday, the Federal Statistical Office (Destatis) published figures showing that incoming orders in Germany’s manufacturing sector fell by 1.6 percent in May compared to the previous month. This marked the fifth consecutive decline.

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The renewed decrease was attributed to a “noticeable drop in orders from abroad,” which fell by 2.8 percent month-on-month, particularly from countries outside the euro area, according to the Ministry for Economic Affairs and Climate Action (BMWK). Domestic demand, on the other hand, saw a slight increase.

Fewer aircraft orders led to a significant decline of 19.2 percent for manufacturers of transport equipment, including aircraft, ships and trains. In contrast, an increase of 11.2 percent for manufacturers of computer, electronic and optical products had an overall positive effect.

The development “initially points to a rather subdued industrial economy in the coming months,” BMWK said, adding that stabilization of incoming orders is expected “only as global trade continues to recover and demand for industrial products gradually picks up.”

The business climate in Germany’s manufacturing sector declined following three consecutive increases. According to the ifo Institute’s report at the end of June, companies have become “more skeptical for the months ahead” and are particularly concerned about the declining order backlog.

On Wednesday, the Federation of German Industries (BDI) called for strengthening Germany as a business location through increased investment, proposing an infrastructure, transformation, and resilience package totaling around 400 billion euros (US$432 billion) over the next decade.

BDI suggested that approximately one quarter of this amount should be allocated to additional incentives aimed at stimulating private investment in transformation, buildings and resilience, with the remaining three quarters dedicated to public investment.