German manufacturing orders saw an unexpected increase in December, primarily driven by high volumes of aircraft purchases. However, when excluding larger orders, overall orders still showed a decline, reflecting the challenging environment faced by the sector.
According to the German statistics office Destatis, orders in December were 8.9% higher compared to the previous month. This figure contrasts with the consensus among economists, who anticipated a 0.5% decrease in orders, as reported by The Wall Street Journal.
This surge in orders effectively offsets several consecutive months of losses, including a 4% decline in October and an 11% downturn in July. Those previous declines were widely regarded as indicators of a manufacturing slump in Germany. In comparison to the same month the previous year, December’s orders were 2.7% higher.
However, it is important to note that these order numbers were significantly influenced by large-scale purchases, particularly in the aircraft sector. Destatis suggests that the notable increase in orders was likely driven by extensive orders placed with aircraft manufacturer Airbus, which received a remarkable total of 807 orders during the month.
In terms of specific industries, orders for aircraft, ships, and trains more than doubled in December compared to November. Additionally, there was a notable increase in orders for metal products and electrical equipment, both experiencing double-digit percentage growth.
Conversely, the automotive industry in Germany encountered a 15% drop in orders during this period. Mechanical engineering and the chemical industry also experienced declines. When excluding major purchases, overall orders decreased by 2.2% compared to the previous month.
Overall, these order figures exemplify Germany’s continuing struggles within its manufacturing base. Throughout 2023, orders were 5.9% lower compared to the previous year, according to Destatis. This decline can be attributed to a global decrease in demand and constrained financing conditions.