DE: Manufacturers' Orders

Thu Feb 05 01:00:00 CST 2015

Consensus Actual Previous Revised
Month over Month 1.5% 4.2% -2.4%
Year over Year 0.9% 3.4% -0.4% -0.5%

Manufacturing orders rebounded surprisingly sharply in December. Following an unrevised 2.4 percent fall in November, a 4.2 percent monthly increase was well above market expectations and the strongest gain since July. Annual growth jumped from minus 0.5 percent to 3.4 percent, also its best reading in five months.

The monthly headline increase was driven by a 5.7 percent surge in capital goods that easily more than reversed November's 2.9 percent drop. Basics (2.8 percent) also enjoyed a good month but consumer and durables slipped 0.6 percent.

Domestic orders expanded 3.4 percent versus mid-quarter and reflected solid rises in all three main subsectors, notably consumer and durables (5.7 percent). Overseas demand was up an even more robust 4.8 percent, mainly thanks to a 7.6 percent spurt in capital goods as consumer and durables slumped 5.1 percent on the back of a 15.6 percent nosedive elsewhere in the Eurozone.

Today's data mean that overall fourth quarter orders rose a healthy 1.9 percent versus the third quarter when they edged up just 0.2 percent. This suggests a rather more positive outlook for German industry than implied in yesterday's January manufacturing PMI. It also probably makes for some upside risk to tomorrow's December industrial production 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.