Demand for machinery, equipment, and metals slumped in October, data shows
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New orders for German-made industrial goods dropped unexpectedly in October amid the energy crisis and weak global demand, provisional data from the country’s federal statistics office Destatis showed on Wednesday.
Factory orders in manufacturing were down 7.3% year-on-year and down 3.7% from September. The figures defied analysts’ predictions of a 0.2% increase month-on-month.
Destatis attributed the slump mainly to the performance of the machinery and equipment sector, where new orders declined by 13.5% from September, when there was a 9.8% rise in new orders.
Demand was also down in other major sectors such as fabricated metal products (except machinery and equipment), the manufacture of basic metals, electrical equipment, and automotive parts, the data suggests.
Foreign orders fell by 7.6% month-on-month, while domestic orders rose by 2.4%.
Among the sectors that reported an increase in new orders were aircraft, ship, and train equipment manufacturers, which experienced a 20.2% jump. The consumer goods sector reported an increase of 2.8%.
Germany’s industrial output shrank 0.1% in July-September and economists forecast another contraction in the current quarter, putting the EU’s economic powerhouse on track for recession.
“So far, many companies have compensated for the lower order intake by working off their order backlogs,” Commerzbank economist Ralph Solveen told Reuters.
“In the long term, however, they will not be able to avoid reducing their production, which suggests that the German economy will continue to shrink in the winter months,” he added.
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