German factory orders fell in November, a reminder that the country’s manufacturers are still struggling — even as the economic backdrop improves.
(Bloomberg) — German factory orders fell in November, a reminder that the country’s manufacturers are still struggling — even as the economic backdrop improves.
Demand declined 5.3% from the previous month, more than the 0.5% that analysts had predicted in a Bloomberg survey. The slump was driven by a drop in foreign orders, especially from the euro zone, the German statistics office said Friday.
Surveys of purchasing managers by S&P Global this week showed that Germany’s manufacturing downturn is easing, though the data continued to point to a contraction. Demand is still being weighed down by uncertainty and high levels of inventory among customers.
While Germany is now expected to escape a deep winter slump, inflation remains a thorny issue. Data for the euro area, due later Friday, are expected to show underlying price pressures remaining elevated even as the headline rate declines. That’s likely to see the European Central Bank press on with interest-rate hikes.
The outlook is also clouded by the sudden reversal of Covid-19 restrictions in China — one of Germany’s top trading partners. Overall exports already fell 0.3% from the previous month in November, with those to China dropping 1.5%, data published Thursday showed.
–With assistance from Joel Rinneby and Kristian Siedenburg.
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