German industrial orders surpass pre-crisis levels

04 Dec 2020

Industrial orders in Germany increased more than forecast on the month in October, according to data published on Friday, exceeding their pre-pandemic level for the first time since the start of the coronavirus crisis.

The statistics are fuelling hopes that Germany’s manufacturing sector got off to a robust start in the fourth quarter during a second wave of the Covid pandemic, Reuters reports.

According to Jens-Oliver Niklasch, senior economist at Landesbank Baden-Wuerttemberg: “Industry is doing well again. The economic weakness resulting from the pandemic is more or less the result of the services sector. And this will not change soon.”

New contracts were 0.8% higher than their level in February this year, as orders for industrial goods increased by 2.9% in seasonally adjusted terms said the Federal Statistics Offices, compared to a Reuters forecast for a 1.5% rise.

The figure for September was upwardly revised to a 1.1% rise.

Economy Ministry stats revealed domestic orders edged up 2.4% on the month, whilst orders from overseas were 3.2% higher and eurozone contracts increased by 0.5%.

In addition, a breakdown of the data revealed demand for capital and intermediate goods has risen, whilst demand for consumer goods had declined.

Germany’s economy, the largest in Europe, expanded by a record 8.5% in Q3 this year as coronavirus restrictions were eased and shops and factories were permitted to reopen.

Nevertheless, a fall in economic output may be on the cards for the fourth quarter.

Fresh lockdowns announced by German Chancellor Angela Merkel for November to attempt to contain the spread of the second wave of the virus, likely impacted demand again.