German Factory Orders Rose Less Than Expected In November
German factory orders rose much less than anticipated in November, a discouraging sign for Europe’s largest economy that is relying on its outsized manufacturing base to regain growth.
(Bloomberg) -- German factory orders rose much less than anticipated in November, a discouraging sign for Europe’s largest economy that is relying on its outsized manufacturing base to regain growth.
Monday’s data showed a 0.3% increase in demand — falling short of analysts’ expectations of a 1.1% gain. The uptick from October — which saw a 3.8% drop — was due to large orders, the statistics office said.
The outcome underscores Germany’s enduring industrial woes caused by the energy crisis and weak global demand. This malaise has probably plunged the country into its first recession since the pandemic, with economists expecting data on Jan. 15 to show a second consecutive contraction in the final quarter of 2023.
“Today’s industrial orders data improvement is far too little to prepare for a substantial rebound in industrial activity over the coming months,” said Carsten Brzeski, global head of macro at ING. “It still needs many more of these positive data releases to signal any significant rebound of the economy.”
The threat of train strikes, violent protests of angry farmers and uncertainty over the impact of the budget reshuffling in Berlin after a shock court judgment further beset the country.
Trade data were more positive. Exports increased 3.7% from October, the biggest monthly jump in more than 1 1/2 years.
While the outlook for a return to sustained growth this year is bleak — the Bundesbank anticipates overall growth of just 0.4% — the economic slump may at least aid the return of inflation to the European Central Bank’s 2% target. German consumer prices released last week showed a jump of 3.8% in December, though that was less than economists anticipated.
--With assistance from Mark Schroers, Joel Rinneby and Kristian Siedenburg.
(Updates with economist comment in fourth paragraph)
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