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German Factory Order Boost Masks Underlying Weakness

GERMAN DATA
MNI (London)

GERMANY DEC FACTORY ORDERS +3.2% M/M (FCST +2.0%); NOV -4.4%r M/M

GERMANY DEC FACTORY ORDERS -10.1% Y/Y (FCST -11.6%); NOV -10.2%r Y/Y

  • German manufacturing new orders recorded a robust end to Q4, expanding by +3.2% m/m (vs +2.0% expected), largely rebounding from the -4.4% m/m contraction in November.
  • Large-scale orders, especially in electricity manufacturing, engines, vehicles and aircraft machinery, accounted for the bulk of the December growth.
  • The headline figure masks underlying weakness, as excluding large-scale orders a -0.6% m/m decline was recorded. The -3.3% m/m fall in consumer goods orders reiterates the weak demand environment.
  • New orders were -10.1% y/y lower than December 2021, where strong post-covid demand persisted and remained a modest +1.2% above pre-covid Dec 2019 levels. China’s recent reopening measures will lift export orders, signalling a more robust start to 2023 in data to come.

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