New orders in manufacturing declined by 1.0 percent compared to May, driven largely by a steep drop in large-scale transport equipment orders (minus 23.1 percent) and setbacks in the automotive (minus 7.6 percent) and metal product industries (minus 12.9 percent). However, when excluding these large-scale orders, the picture improves slightly, with a modest 0.5 percent rise month-over-month.

Year-over-year data reveals a stark contrast. While June saw only a 0.6 percent increase from June 2024, May had reported a robust 6.3 percent growth over the previous year, partly due to a late-reported major order that revised earlier figures.

On a more positive note, intermediate goods rose by 6.1 percent, consumer goods by 0.5 percent, and electrical equipment soared (23.5 percent), helping to cushion the decline. Domestic demand also showed resilience, climbing 2.2 percent, although foreign orders dropped 3.0 percent, weighed down by a 7.8 percent fall from outside the euro area.

Despite weaker orders, real turnover in manufacturing grew by 0.9 percent in June, suggesting production processes remained active. Overall, the data reflect underlying volatility and dependence on high-value transport orders, with moderate domestic strength balancing global demand weaknesses. This latest update leaves the RPI at 5 and the RPI-P at minus 5, meaning that economic activities continue to stay within the expectations of the German economy.

Orders are expected to rebound by 1.2 percent on the month in June after a big 1.4 percent drop in May. The consensus sees orders up only 2.1 percent on the year after rising 5.6 percent on year in May.

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.