Factory Orders Slump in March on Misc. Vehicles

GERMANY MAR FACTORY ORDERS -10.7% M/M (FCST -2.3%); FEB +4.5%r M/M

GERMANY MAR FACTORY ORDERS -11.0% Y/Y (FCST -31%); FEB -6.0%r Y/Y

• German manufacturing orders saw a marked drop in the March data, falling -10.7% m/m and -11.0% y/y. A much milder -2.3% m/m contraction had been anticipated by consensus.
• This is the strongest decline since records began in April 2020.
• Excluding large-scale orders, factory orders fell -7.7% m/m. Miscellaneous vehicles drove the decline, falling -47.4% m/m, after the February boost which likely reflected army vehicle production.
• Motor vehicles and parts also slowed considerably (-12.2% m/m). Only consumer goods orders expanded on the month at a modest +1.2% m/m.
• In aggregate, Q1 new orders were +0.2% higher than Q4.
• Looking forward, the April manufacturing PMI signaled continued headwinds to demand, as firms reduce stock levels and overall purchasing hesitancy prevails. The April PMI dipped to a May 2020 low, and suggested that production levels remain elevated due to easing supply conditions assisting working through backlogs.
• Destatis flagged backlogs being sufficient for 7.5 months of continued production in the latest February data, implying overall production will be buffered for now despite waning demand.