German factory orders unexpectedly rise in May

German factory orders unexpectedly rose in May, according to figures released on Wednesday by Destatis.

Factory orders were up 0.1% on the month following a revised 1.8% decline in April, beating expectations for a 0.6% drop.

On the year, orders fell 3.1% in May following a revised 5.3% slump in April.

Foreign orders in manufacturing rose 1.3% on the month. New orders from the non-euro area were 3.7% higher, while orders from the eurozone fell 2.4% and domestic orders were down 1.5% on the previous month.

The producers of capital goods saw a 3.3% increase, while the makers of intermediate goods saw new orders fall 3.2% on the month in May. Consumer goods orders declined 4.5%.

Destatis said: "Although new orders stagnated and turnover increased markedly, the volume of new orders was higher than the volume of turnover in May 2022, as in the preceding months. The excess demand is likely to be due to the continuing acute shortage of intermediate products.

"Enterprises still have difficulties completing their orders as supply chains are interrupted because of the war in Ukraine and distortions persist that have been caused by the Covid-19 crisis, such as the closure of ports in China.

"77.2% of the industrial enterprises surveyed complained of bottlenecks and problems in procuring intermediate products and raw materials in May 2022, according to the Ifo Institute for Economic Research."