Machine Orders Data Points To Slow And Gradual Recovery

German machinery orders came in at -17% Y/Y in March (vs -10% prior) - but looking underneath the headline figure, the data portrays a more constructive outlook.

• March's Y/Y decline was driven largely by base effects, and VDMA (which produces the data) points out that foreign orders appear to have bottomed out. Also for domestic orders, VDMA sees signs that orders are set to stabilize going forward, albeit at relatively low levels.
• Domestic orders printed -23% Y/Y (vs -11% prior), while foreign orders came in at -15% Y/Y (vs -10% prior). As with the overall figure, the decreases were driven by a base effect, as March 2023 orders were unusually high. Sequential data is not publicly available.
• VDMA cites brightening sentiment among industrial customers, though predicts a potential recovery will be slow and gradual.
• March overall German factory orders (+0.4% M/M cons after ongoing declines considering the 'core' measure) and industrial production data (-1.0% M/M cons after two consecutive increases) are released next week and will provide a key update for industrial growth at the end of Q1.

MNI, VDMA, Destatis