DE: Manufacturers' Orders

Mon Jul 06 01:00:00 CDT 2015

Consensus Actual Previous Revised
Month over Month -0.4% -0.2% 1.4% 2.2%
Year over Year 3.8% 4.8% 0.5% 1.3%

Manufacturing orders fell a slightly shallower than expected 0.2 percent on the month in May. The decline followed a significantly larger revised 2.2 percent jump in April and put orders 4.8 percent above their level a year ago, up from a 1.3 percent annual increase last time.

May's monthly dip was attributable to a 0.8 percent reversal in capital goods and a 1.2 percent drop in consumer and durables. Basics advanced 1.2 percent.

Domestic orders were off 0.6 percent on the back of a 2.9 percent slump in capital goods but overseas demand edged 0.2 percent firmer despite a 1.5 percent slide in the Eurozone.

Average orders in April/May were some 2.5 percent above their mean level in the first quarter when they contracted 1.5 percent. The improvement is well timed in the wake of a number of disappointing economic releases of late and suggests that manufacturing output (May data due tomorrow) should make a useful contribution to second quarter real GDP growth. That said, both the PMI and Ifo surveys suggested that business activity in the sector was relatively sluggish in June.

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.