DE: Manufacturers' Orders

Thu Aug 06 01:00:00 CDT 2015

Consensus Actual Previous Revised
Month over Month 0.7% 2.0% -0.2% -0.3%
Year over Year 5.5% 7.0% 4.8% 4.7%

Manufacturing orders followed a slightly steeper revised 0.3 percent monthly fall in May with a surprisingly strong 2.0 percent rebound in June. The increase lifted seasonally and workday adjusted annual orders growth from 4.7 percent to 7.0 percent, its strongest performance since January 2014.

June's recovery was dominated by the capital goods subsector which posted a 3.7 percent monthly bounce that easily more than offset May's 1.2 percent decline. However, both basics (minus 0.4 percent) and consumer and durable goods (minus 0.6 percent) saw fresh falls.

In fact the headline gain was wholly attributable to overseas demand as the domestic market shrank a monthly 2.0 percent on the back of across the board weakness. Within a 4.8 percent spurt in foreign demand, orders from the Eurozone were up 2.3 percent and from the rest of the world some 6.3 percent.

The latest figures underline the volatile nature of the monthly orders report. However, for the second quarter as a whole, a 3.1 percent increase versus the previous period when they dropped 1.5 percent bodes well for the near-term outlook for industrial production. That said, the July manufacturing PMI survey was hardly robust so a strong pick-up in momentum this quarter still seems unlikely.

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.