Falling foreign demand drives down German industrial orders

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A worker from the German silo and liquid tank manufacturer Feldbinder Special Vehicles moves aluminum rolls in the company’s factory in Winsen. Photo: REUTERS / File

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A worker from the German silo and liquid tank manufacturer Feldbinder Special Vehicles moves aluminum rolls in the company’s factory in Winsen. Photo: REUTERS / File

Weaker foreign demand led to a much larger-than-expected drop in German industrial orders, including cars, in October, according to data released on Monday, further clouding the growth prospects for manufacturers in Europe’s largest economy.

A shortage of microchips and other electronic components linked to a pandemic has caused massive supply bottlenecks and production problems in Germany’s powerful auto industry and other important sectors of the economy.

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Orders for “Made in Germany” products fell 6.9% on the month in seasonally adjusted terms after a revised increase of 1.8% in September and a drop of 8.8% in August, according to the figures of the Federal Statistical Office. A Reuters poll of analysts indicated a smaller drop of 0.5% from October.

“After inbound orders hit a record high in mid-2021, the index has lost more than 16 points in recent months,” the Economy Ministry said, adding that the second sharp drop in three months had put an additional brake on the economy. perspectives.

Excluding the distorters related to bookings of high-priced items such as planes, industrial orders were still down 1.8%, the data showed.

The drop was caused by a drop in foreign orders of more than 13% over the month, with demand from countries outside the euro zone such as China being particularly weak. Orders from domestic customers rose 3.4 percent.

“The new closures in Asia are slowing the industry in Germany,” said Thomas Gitzel, VP Bank analyst. He added that the current wave of coronavirus infections across the world is putting a new burden on the global economy.

Gitzel said domestic demand is expected to remain strong, aided by the commitment of the new ruling coalition to invest heavily in the green economy.

“Decarbonizing the economy requires major investments in new technologies. German industry can and will benefit,” Gitzel said.

Weak order data suggests manufacturing will hamper overall economic growth in the coming months, with analysts expecting stagnation at best in the last quarter of this year.


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