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Tags: Factory Orders

Germany

POST » 5th September, 2019 » July Germany Factory Orders

Although there was a slight upward revision to the June numbers, there isn’t much to cheer in the German July factor orders report.  Orders fell a further 2.7% m/m.  That takes the current decline to -11.2% from its peak.

Factory orders missed once again with a terrible 2.2% m/m decline in volumes.  That has dropped the y/y rate to -8.7%, which represents a 117 month low and the 10th consecutive negative y/y reading.  In index terms we’re now down 11.3% from the December 2017 peak.

June ISM non-manufacturing index recorded a further decline and while the Final Markit Services PMI was revised up a little, the overall story remains brittle.  The ISM non-manufacturing report showed declines in the rate of activity, output and new orders with only export orders showing stability.

Another weak durable good orders report, with the outcome surprising to the downside of expectations, pushing the y/y rate deeper into negative territory.  Ex-ing out the more volatile components improves the picture somewhat but the overall story is still unimpressive.

Deterioration continues to run at pace, with some rebound in domestic demand failing to offset continuing weakness on the export side.  The release points to a further deterioration in exports in the coming months, although the decline in industrial production is running more closely, suggesting that a further downward adjustment/slump is not needed there.

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