German Factory Orders Surpass Expectations with 2.9% Rise in July
Germany's manufacturing orders rose by 2.9 percent in July 2024 compared to the previous month, according to the Federal Statistical Office (Destatis). This growth marks the second consecutive month of rising orders, following a revised 4.6 percent increase in June. The increase was primarily driven by large-scale orders in the construction of military vehicles, aircraft, ships, and trains, which surged by 86.5 percent. Orders for electrical equipment also saw a significant rise of 18.6 percent. Despite these gains, the mechanical engineering sector experienced a decline of 6.1 percent in new orders.
New orders from abroad contributed significantly to the overall increase, rising by 5.1 percent, with orders from the Eurozone up by 5.9 percent and those from the rest of the world by 4.4 percent. In contrast, domestic orders remained unchanged. The less volatile three-month comparison showed a 1.7 percent increase in new orders from May to July 2024 compared to the previous three months. However, when excluding large-scale orders, new orders for July 2024 were down by 0.4 percent from June 2024.
On a year-on-year basis, new orders in July 2024 grew by 3.7 percent, following a decline of 11.2 percent in the previous month. The overall increase in factory orders comes amid broader concerns about the competitiveness of Germany's industrial sector, which has faced a prolonged downturn since mid-2022. While the rise in factory orders provides a rare positive signal for the sector, the underlying challenges, including subdued foreign demand and competition from China, continue to pose significant risks.
