Manufacturing orders again disappointed in November. A 0.3 percent monthly rise was well short of the market consensus and did little to reverse a marginally steeper revised 3.8 percent slump in October. Base effects meant that annual growth jumped from minus 7.3 percent to minus 4.3 percent, but orders still matched their second-weakest level since June 2020.

More positively, the monthly headline advance was at least led by the domestic market which saw a 1.4 percent increase. By contrast, overseas demand fell 0.4 percent with new orders from the Eurozone down 1.9 percent and from the rest of the world 0.6 percent. At a sector level, capital goods recorded a 0.8 percent rise while consumer goods were up 1.1 percent. However, intermediates were off 0.4 percent.

November's meagre advance leaves average total orders in October/November still some 2.6 percent below their third quarter average and so sustains a clear downtrend. Near-term prospects for industrial production remain poor. However, today's report lifts the German RPI to exactly zero and the RPI-P to 8. In other words, in broad terms, overall economic activity is evolving much as the forecasters expected, if not slightly outperforming.

Manufacturers' orders are expected to increase 1.3 percent on the month in November versus October's unexpected 3.7 percent slump.

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.