German factory orders jump in boost for beleaguered sector
GERMAN factory orders surged in September, a positive signal for the industrial sector whose prolonged bout of weakness may be coming to an end.
Demand rose 4.2 per cent from the previous month, much more than the 1.5 per cent economists polled by Bloomberg had estimated. The size of the advance was boosted by bulk orders, though even without them there’d have been a 2.2 per cent rise, the German statistics office said on Wednesday (Nov 6) in a statement.
Vehicle manufacturing more than doubled, it said, also noting an uptick in overall foreign demand.
Alongside recent upticks in sentiment indicators, the Economy Ministry said the data signal that Germany’s manufacturing slump is bottoming out towards the end of 2024.
German industry has become a heavier drag on the euro region as companies battle weak demand around the globe, high borrowing costs and structural problems at home that have been in the making for years.
Volkswagen is discussing cost-saving measures with staff that may lead to unprecedented plant closures its home country. Its biggest peers, Mercedes-Benz Group and BMW, have also been struggling and are rethinking their transition to electric vehicles.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The problems are rippling through the supply chain. Parts makers Schaeffler and ZF Friedrichshafen are planning thousands of job cuts while Robert Bosch GmbH warned last week it won’t achieve its financial targets. Continental plans to spinoff its struggling car-parts unit.
“A recovery is not in sight any time soon,” the German Chamber of Commerce and Industry said in response to Wednesday’s report, though it does offer a “glimmer of hope.”
A recent survey by the group showed almost 40 per cent of German manufacturers of industrial goods are planning to reduce investments at home.
The barrage of bad news has put the government on alert, though it’s also highlighted deepening divisions within Chancellor Olaf Scholz’s three-party coalition. He and his ministers have held rival meetings with industry groups and labour officials while publishing conflicting policy papers on how to get the economy out of its rut. BLOOMBERG
Share with us your feedback on BT's products and services
