German Factory Orders Growth Exceeds Expectations
Germany’s factory orders logged a much faster than expected growth in May driven by the surge in demand for volatile ‘other transport equipments’, official data revealed Thursday.
Elsewhere, a private survey showed that the German construction sector contracted the most since February 2021 as higher interest rates and economic uncertainty weighed on demand.
Factory orders advanced 6.4 percent on a monthly basis in May, following a 0.2 percent rise in April, Destatis reported. Orders were expected to grow 1.5 percent after April’s initially estimated 0.4 percent drop.
Excluding large scale orders, new orders grew only 3.2 percent in May from the previous month.
Domestic orders grew 6.2 percent and foreign orders gained 6.4 percent. Within foreign demand, orders from the euro area moved up 6.5 percent and those from the rest of the world climbed 6.2 percent.
Destatis said the manufacture of motor vehicles, trailers and semi-trailers, which were up 8.6 percent, and the manufacture of other transport equipment, up 137.1 percent had a particularly positive impact on the overall performance.
The ‘other transport equipment’ includes the manufacture of ships, railway rolling stock, air and spacecraft, and military vehicles.
By contrast, the manufacture of electrical equipment showed a sharp 15.0 percent decrease.
Among sectors, orders for capital goods posted a 12.0 percent rise, while orders for intermediate and consumer goods decreased 1.1 percent and 0.8 percent, respectively.
On a yearly basis, factory orders declined at a slower pace of 4.3 percent after a 9.3 percent decrease.
A survey data showed the S&P Global/HCOB construction Purchasing Managers’ Index posted 41.4 in June, down from May’s 43.9.
A reading below 50.0 indicates contraction. The score also signaled the biggest fall in activity since February 2021.
Housing activity was the worst-performing category in the construction sector. Activity dropped at the sharpest rate since February 2010. At the same time, commercial and civil engineering activity logged identical declines.
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