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Foreign Order Books Mask Factory Orders Contraction

GERMAN DATA
MNI (London)

GERMANY OCT FACTORY ORDERS +0.8% M/M (FCST +0.1); SEP -2.9%r M/M

GERMANY OCT FACTORY ORDERS -3.2% Y/Y (FCST -4.8%); SEP -9.8%r Y/Y

  • German factory orders recovered to +0.8% m/m in October, following September's 2.9% m/m plunge. This beat expectations of a 0.1% m/m gain, as buoyant foreign orders and large-scale order books kept demand afloat.
  • Excluding large-scale orders, factory orders were contractive by -1.2% m/m.
  • Capital goods production was expansive (+3.2% m/m), implying robust long-term investment plans. Meanwhile, immediate goods fell -1.4% m/m and consumer goods orders fell sharply by -6.3% m/m, to come in line with falling retail demand.
  • Tomorrow's German industrial production data is projected to record a shaky start to Q4, contracting by -0.6% m/m and -0.7% y/y. Energy-intensive production remains severely hampered by high energy prices and survey data continues to signal that the German economy teeters on the edge of a recession.

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