Photographer: Krisztian Bocsi/Bloomberg

German Factory Orders Recover as Economic Momentum Strong

  • Orders rose 3.4% in February vs. estimated gain of 4%
  • Pick-up led by domestic demand as export orders flat

German factory orders rebounded from their steepest decline in eight years in a sign the recovery in Europe’s largest economy remains intact.

Orders, adjusted for seasonal swings and inflation, rose 3.4 percent in February, after slumping a revised 6.8 percent in January, data from the Economy Ministry in Berlin showed on Thursday. The typically volatile reading compares with a median estimate for a 4 percent gain in a Bloomberg survey. Orders were up 4.6 percent from a year earlier, when adjusted for working days.

Germany’s economy expanded at the fastest pace in five years in 2016 and recent data show that trend is set to continue with private-sector output accelerating, unemployment falling to a record low and business confidence at the highest since 2011. Even so, risks including September’s federal elections, Brexit and uncertainty over U.S. trade policies continue to hang over the outlook for spending and investment.

The rebound was led by a 8.1 percent jump in domestic demand, while export orders were unchanged from January. Intermediate-goods orders surged 8.5 percent in February, while demand for investment goods rose 0.3 percent and that for consumer goods increased 2.7 percent, the ministry said.

“Manufacturing orders recovered after a sharp decline at the start of the year,” the ministry said in an e-mailed statement. “Order intake was lower than in the very strong fourth quarter, which was characterized by bulk orders. However, the volume of orders as well as the business climate in the manufacturing sector rose” and “a slight upturn in manufacturing is to be expected,” the ministry said.

The ministry will publish industrial-production data for February on Friday.

— With assistance by Kristian Siedenburg

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