Manufacturing orders were again weaker than expected in April. A 0.2 percent fall versus March was quite well wide of the market consensus and made for the fourth decline in as many months. Following a steeper revised 0.8 percent slide in March, positive base effects still ensured annual growth picked up from minus 2.3 percent to minus 1.3 percent but orders now stand at their weakest level since June 2020.

The domestic market contracted a further 0.3 percent while foreign orders were down 0.1 percent despite a 0.6 percent advance from the rest of the Eurozone. Overall orders for capital goods were up 0.5 percent and for consumer goods 0.7 percent but demand for intermediates fell 1.7 percent.

The monthly orders data remain very volatile but an ongoing weakening trend is clear enough. Manufacturing has offered some tentative signs of a turnaround in recent months and the April fall was the shallowest so far in 2024 but the sector is still struggling. Near-term prospects for industrial production are not good. That said, today's report puts the German RPI at minus 1 and the RPI-P at 4 signalling that overall economic activity is at least essentially matching market expectations.

Manufacturing orders are expected to increase a monthly 0.5 percent in April to reverse March's weaker-than-expected 0.4 percent decline.

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.