DE: Manufacturers' Orders

Fri Dec 04 01:00:00 CST 2015

Consensus Actual Previous Revised
Month over Month 1.7% 1.8% -1.7% -0.7%
Year over Year -2.5% -1.5% -0.9% -0.6%

Manufacturing orders saw their first rise in October since June. Moreover, a marginally firmer than expected 1.8 percent monthly increase also followed a significantly smaller revised decline in September although this still failed to prevent annual growth from deteriorating from minus 0.6 percent to minus 1.5 percent.

October's monthly advance was reassuringly broad-based and included hefty gains in consumer and durable goods (3.8 percent) and capital goods (2.7 percent). Basics were up a modest 0.1 percent.

Geographically, the headline growth was roughly evenly split between the domestic and overseas markets with the former up 1.7 percent versus September and the latter 1.8 percent stronger. Foreign orders were lifted by a 2.4 percent bounce in demand from the rest of the Eurozone although even this reversed only about a half of the previous month's slump.

Total orders in October were 0.6 percent above their average level in the third quarter when they contracted some 2.7 percent. The monthly figures are very erratic and, as September's amendments make plain, subject to sometimes sizeable revision. However, the solid start to the fourth quarter is more in keeping with recent business surveys and probably paves the way for a much better period for manufacturing output.

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.