New manufacturing orders swung positively in June, breaking a five-month streak of declines with a 3.9 percent uptick in real adjusted prices of new orders on the month-over-month indices. In contrast, there is a stark 11.7 percent (seasonally and calendar-adjusted) decline compared to a year earlier.

Notably, the automotive industry's significant 9.3 percent month-over-month surge substantially contributed to this rebound. The manufacture of fabricated metal products and other transport equipment sectors also performed robustly, with increases of 9.8 percent and 11.7 percent, respectively. However, the overall positive trend was partially offset by a 7.9 percent decline in the manufacture of computer, electronic and optical products sector.

In addition, the revised data showed a 1.7 percent decrease in new orders for May, slightly worse than the initial estimate of 1.6 percent fall. Finally, real turnover in manufacturing (seasonally and calendar-adjusted) dropped by 0.9 percent from May to June and fell 5.0 percent compared to a year earlier, highlighting ongoing challenges. The revised figures for May showed a lesser decline of 0.3 percent month-over-month, improving from the initially reported decline of 0.7 percent.

This mixed outlook on the monthly and yearly new orders underscores a cautiously less pessimistic outlook amid the previous downturn. That said, today's report raises the German RPI to minus 8 and the RPI-P to minus 13 signalling that overall economic activity is beginning to pick up even though it still falls short of market expectations.

Manufacturing orders are expected to increase a monthly 0.8 percent in June versus May's unexpected 1.6 percent decline, which was the fifth dip in a row and the fifth month in a row to miss the consensus estimate.

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.