DE: Manufacturers' Orders

Thu Jan 08 01:00:00 CST 2015

Consensus Actual Previous Revised
Month over Month -0.8% -2.4% 2.5% 2.9%
Year over Year 1.1% -0.4% 2.2% 2.6%

Manufacturing orders fell more steeply than expected in November. A 2.4 percent monthly drop followed an upwardly revised gain of 2.9 percent in October and saw annual orders growth slide from 2.6 percent to minus 0.4 percent.

The overall decline was dominated by the domestic market which recorded a sizeable 4.7 percent monthly contraction, although this still failed to offset a 5.9 percent bounce at the start of the quarter. Within this, falls were broad-based with basics down 2.7 percent, capital goods 7.2 percent and consumer and durable goods 0.4 percent.

Overseas demand held up rather better with a monthly drop of only 0.7 percent. Orders from the rest of the Eurozone actually increased some 2.7 percent courtesy of a 9.1 percent spike in capital goods but non-EMU demand shrank 2.6 percent on the back of hefty contractions in capital goods (4.7 percent) and consumer and durables (8.2 percent).

Amidst what is always a very volatile monthly profile the underlying trend in orders remains gently positive. Hence, average orders for October/November were 0.9 percent above their third quarter mean and suggest that industrial output should make further gains over coming months. That said, today's data probably make for some downside risk to tomorrow's November output report.

Manufacturers' orders measure new orders placed for manufactured goods, both domestic and foreign.

Manufacturers' orders data are keenly awaited by analysts each month. The data present a detailed breakdown by various sectors and a reading of the pulse of a major sector of the economy. Like the PPI, manufacturing orders data exclude construction, which is the preferred Eurostat measure.

The manufacturers' orders data rank among the most important early indicators for monitoring and analyzing German economic wellbeing. Because these data are available for both foreign and domestic orders they are a good indication of the relative strength of the domestic and export economies. The results are compiled each month in the form of value indexes to measure the nominal development of demand and in the form of volume indexes to illustrate the price-adjusted development of demand. Unlike in the U.S., orders data are not collected for all manufacturing classifications - but only those parts in which the make-to-order production plays a prominent role. Not included are, for example, mining, quarrying and the food industry.