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.
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The survey data still continues to paint a rather bleak picture for German industry with the expectations component taking a renewed step lower in June and while current conditions were a shade better than expected together this marked a new low point in this leg of the cycle for the overall climate index.
April turned out to be another poor month for German industry with the decline in overall industrial production fairly modest compared to the drop on the manufacturing side, where output dropped 2.5% on the month leaving output down 3.4% y/y.
This morning completed the March industrial production and orders reports for Germany. Although the m/m bounce in industrial production extended, the prior month’s downward revision took some of the gloss off this and the y/y comparison still looks gloomy.
The picture for German manufacturing continues to look rather bleak judging by the April IFO survey, with the modest improvement on the services side masking an even sharper deterioration in trade and industry. This leaves the business cycle clock looking even gloomier, albeit the relative resilience of current conditions keeping us well clear of recessionary territory.
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.
While there looks to have been an improvement in March it’s generally led by a better services performance. Looking at industry the trajectory remains weak with the ‘IFO clock’ remaining in downswing territory amid a further mild deterioration in expectations. This continues to suggest ongoing manufacturing weakness, confirming the deterioration seen in the manufacturing PMI.
German January factory orders, February Germany vehicle production chart pack
January Germany factory orders and auto production data
