German Factory Orders Log Stronger-Than-Expected Rebound

(RTTNews) - Germany's factory orders registered a stronger-than-expected rebound in May, raising hopes of gradual recovery, official data revealed Monday.

Factory orders expanded 1.9 percent on a monthly basis in May, in contrast to the revised 3.2 percent decrease in April, Destatis reported. Orders were forecast to grow 1.1 percent.

Excluding large scale orders, new orders increased 1.0 percent from the previous month.

Foreign orders rose 2.2 percent in May, with orders from the euro area increasing 11.2 percent. However, orders from outside the euro area declined 3.2 percent. Domestic orders advanced 1.3 percent.

There was a substantial growth in the manufacture of other transport equipment sector, as orders surged 85.0 percent. On the other hand, the automotive industry reported a 3.8 percent fall. In the manufacture of computer, electronic and optical products, orders decreased 7.8 percent.

New orders for capital goods were up 2.2 percent and that for intermediate goods climbed 1.4 percent. New orders for consumer goods expanded 2.4 percent.

On a yearly basis, growth in factory orders accelerated to 6.2 percent from 2.1 percent in the previous month, data showed.

Further, manufacturing turnover increased 1.8 percent from April, when turnover was up only 0.1 percent. Compared to last year, turnover climbed 4.2 percent.

ING economist Carsten Brzeski said the monthly growth suggests that parts of German industry are still benefiting from the rechannelling of international orders due to the war in the Middle East.

However, despite today's encouraging data, order books are recovering only gradually, the economist noted.

"…despite initial fears that the conflict in the Middle East would trigger new supply chain disruptions, German industry appears to have escaped with little more than a black eye," said Brzeski.