Manufacturing new orders in December 2024 rebounded significantly, rising by 6.9% month-over-month after a 5.2 percent decline in November. This increase was well above consensus estimates and was primarily driven by a 55.5 percent surge in the manufacture of other transport equipment, particularly large-scale orders for aircraft, ships, and military vehicles. Machinery and equipment manufacturing also contributed positively, with an 8.6 percent rise. However, the automotive industry continued to struggle, recording a 3.2 percent decline.

Despite the strong monthly recovery, year-over-year figures remain concerning, with new orders down 5.8 percent from December 2023. A three-month comparison showed no overall growth, highlighting the sector's volatility. Domestic demand surged by 14.6 percent, largely due to transport equipment orders, while foreign demand grew by 1.4 percent, with euro area orders up 6.2 percent but non-eurozone orders declining by 1.5 percent.

However, turnover fell by 0.1 percent in December, indicating that while orders increased, actual revenue generation remained sluggish. This suggests that the manufacturing sector's recovery is still fragile, relying on large contracts rather than sustained demand across industries. The latest update takes the RPI to minus 10 and the RPI-P to 5, meaning that economic activities are generally in line with expectations of the German economy.

Orders are seen rebounding by 1.8 percent on the month after a sharp 5.4 percent decline in December for Germany's beleaguered factory sector. However, orders are expected down by a nasty 10.5 percent on the year after falling by 1.7 percent in November.

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.