DE: Manufacturers' Orders

Fri Sep 04 01:00:00 CDT 2015

Consensus Actual Previous Revised
Month over Month -0.6% -1.4% 2.0% 1.8%
Year over Year 1.1% -0.6% 7.0% 6.8%

Manufacturing orders followed a smaller revised 1.8 percent monthly increase in June with a steeper than expected 1.4 percent reversal in July. With base effects strongly negative, seasonally and workday adjusted growth nosedived from 6.8 percent to minus 0.6 percent, the first negative reading since February.

July's monthly drop was disappointingly broad-based and while consumer and durables dominated (minus 6.3 percent), capital goods were down 1.6 percent and basics 0.2 percent.

However, the headline decline masked a 4.1 percent monthly rise in domestic orders within which capital goods surged fully 8.7 percent. Rather, weakness was concentrated in overseas demand which fell 5.2 percent after a 4.4 percent gain last time. Within this, consumer and durable goods (minus 10.3 percent) were especially soft and capital goods (minus 6.7 percent) were not far behind. Even then, there were sharply contrasting performances between the Eurozone and the rest of the world with the former posting a healthy 2.2 percent overall rise and the latter, a 9.5 percent slump.

Total orders in July were 0.3 percent below their average level in the second quarter when they jumped 3.0 percent versus the previous period. However, the latest fall leaves intact a rising trend and if the new PMI is anything to go by, August probably saw a return to positive growth. For now at least, German manufacturing would seem to be in pretty good shape.

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.