German factory orders collapse in October
German factory orders tumbled in October as foreign demand fell, according to figures released on Monday by Destatis.
Factory orders slid 6.9% on the month following a revised 1.8% increase in September, coming in well below expectations for a 0.5% decline. On the year, orders were down 1% in October following a revised 10.3% jump the month before.
Compared to February 2020, a month before Covid-related restrictions kicked in, new orders were 1.7% higher in seasonally- and calendar-adjusted terms.
Domestic orders rose 3.4% in October on the month, but foreign orders fell 13.1%. New orders from the eurozone were down 3.2%.
Producers of intermediate goods saw new orders decline by 2.7% on the month, while capital goods makers saw a 10.7% decline. Producers of consumer goods saw a 4.3% increase.
ING economist Carsten Brzeski said the orders data "is a cold shower for German industry".
"When the global economy came out of the 2020/21 winter lockdown, German industrial orders jumped to unprecedented levels, growing on average by more than 2% per month. At the end of the summer, however, orders collapsed and dropped by more than 12% between July and October.
"The sharp collapse over the summer is increasingly leaving its mark on industry - a reflection perhaps of ongoing supply chain frictions and companies simply delaying new orders or, worse, cancelling orders, knowing that delivery times are long anyway.
"For the time being, order books are still well filled and every improvement in supply chains should lead to an immediate boost in industrial production. However, the summer collapse of industrial orders does not bode well for the medium-term outlook for industrial production."