German factory orders post surprisingly strong rebound in October

  • Economic Indicators News
German factory orders post surprisingly strong rebound in October
Credit: © Reuters.

By Geoffrey Smith -- Europe's manufacturing heart had a brighter month in October than seemed likely, but a stronger-than-expected rebound in incoming orders was flattered by a handful of large orders. 

Incoming orders to German factories rose 0.8% from September, rather than the 0.1% forecast, Federal Statistics Office Destatis said on Tuesday. It also revised up September's figures to show a drop of only 2.9%, rather than the 4.0% originally reported.  As a result, orders were down 3.2% from a year earlier.

The figures still leave orders on course for a decline in quarter-on-quarter terms, albeit a less steep one than feared. 

Destatis said that large orders - which tend to be highly volatile from one month to the next - were responsible for the rise in October. Without them, overall orders would have declined again, by 1.2%.

Domestic orders fell by 1.9%, while export orders rose by 2.5%, adding to evidence that the relaxation of global supply chain bottlenecks has improved customers' willingness to commit to major purchases. 

In contrast to previous months, which showed a relatively even pattern of weakness, October's figures showed a sharp divergence in sectoral performance: orders for capital goods and intermediate goods rose 3.2% and 1.4%, respectively, but orders for consumer goods fell 6.3%, a reflection of the growing pressure on household incomes across key markets at home and abroad.


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