Manufacturing orders were very strong in mid-quarter. A 4.8 percent monthly jump was more than 10 times the market consensus and the largest increase since June 2021. The latest advance lifted annual growth from minus 12.3 percent and to minus 5.9 percent and means that new business has expanded for three straight months for the first time since November 2021-January 2022.

Domestic demand was largely responsible for February's monthly bounce, climbing fully 5.6 percent. Even so, foreign orders were also up 4.2 percent with the Eurozone surging some 8.9 percent. Overall orders were boosted by a 7.3 percent increase in capital goods which led the way ahead of intermediates (1.3 percent) and consumer goods (1.9 percent). Miscellaneous vehicle construction (55.9 percent) had an exceptional month.

Today's report leaves average total orders in January/February up fully 3.3 percent versus their fourth quarter mean and so makes for a much brighter outlook for industrial production. That said, at 44.7, the March manufacturing PMI was still in recession territory so it is not clear yet that the sector is out of the woods. The German ECDI (18) and ECDI-P (13) continue to indicate that economic activity in general is running slightly hotter than expected.

Orders in February are expected to rise 0.4 percent on the month after climbing a surprisingly strong 1.0 percent in January.

Manufacturers orders are a leading indicator for industrial production. The figures are calculated every month by the Federal Statistical Office and represent the value of all orders for the delivery of self-made products confirmed by industrial enterprises with 50 or more employees in the respective reporting period. The results are broken down by both sector and region of origin (domestic and foreign split into euro area and non-euro area). Monthly volatility can be very high so moving averages give a much better guide to underlying trends.

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.