German Factories Get Unexpected Demand Boost From Big-Ticket Orders
Total orders rose 2.9%, contrasting with economists’ expectations for a 1% drop
Orders at German factories rose unexpectedly in July, adding to the previous month’s rise and offering a rare bright ray for the troubled manufacturing sector.
Total orders rose 2.9%, according to figures put out Thursday by Germany’s statistics agency Destatis. That contrasted with economists’ expectations for a 1.0% drop, per a poll of estimates compiled by The Wall Street Journal. It adds to a 4.6% increase in June.
However, stripping out large-scale orders, July’s total was a little lower on the month. Overall orders were boosted by a near doubling in orders for transportation equipment such as military vehicles, ships, trains and aircraft, but excepting cars and other automotive vehicles.
“New orders were up 86.5% on the previous month [in this segment] due to several large-scale orders,” Destatis said.
An uptick in orders bodes a little better for production in the following months. Output from Germany’s factories is still struggling to get back on its feet after recent years’ energy shock, with demand limping and competition rising from the world’s other manufacturers. Production figures for July will be set out Friday, with economists sketching a slight decline on the month after June’s increase. Further ahead, the sector remains set for sharper contraction, according to a closely-watched survey of manufacturers.