German Factory Orders Drop Unexpectedly

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German factory orders fell unexpectedly in April. This shows that manufacturers in Europe’s largest economy are still struggling with the negative effects of the corona pandemic and measures to prevent the virus from spreading.

 

According to the German Federal Statistical Office, the number of orders fell by 0.2 percent every month in April. This was mainly due to the disappointing demand from our own country. The figures have been adjusted for seasonal influences.

On an annual basis, orders rose by 80 percent, but that comparison is flawed because of the measures taken against the virus in the spring of 2020, the impact of which could not yet be estimated at the time.

Connoisseurs generally assumed that the number of orders would rise by 1 percent after the growth of almost 4 percent a month earlier. The figures also show that the recovery of the German economy is somewhat slower than expected. Previously, German retail sales had already fallen.

The exact reason for the stagnation in the number of orders is conjecture. Supply chain disruptions, particularly the blockade of the Suez Canal, may be to blame, ING economists say. There may also be a temporary hiccup after the strong rebound in the past year.

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