Germany's Industrial Recovery Faces Challenges Amid Order Decrease
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Berlin, Jan 9 (NationPress) The industrial landscape in Germany encountered a notable setback in incoming orders during November 2024, with a decrease of 5.4 percent compared to the previous month, as reported by official data.
This downturn follows a 1.5 percent decline in October, raising further apprehensions about the recovery trajectory of Europe’s largest economy.
The Federal Statistical Office indicated on Wednesday that the decline was primarily due to a significant fall in large orders from the transport equipment manufacturing sector, which encompasses aircraft, ships, and trains. Although these orders were considerable in October, they did not carry over into November, leading to a 58.4 percent month-on-month drop, the office highlighted. When excluding these sectors, incoming orders saw a slight increase of 0.2 percent in November.
Other manufacturing sectors contributed minimally to the overall statistics. New orders in the machinery and chemical sectors rose by 1.2 percent and 1.7 percent, respectively, whereas the pharmaceutical industry faced a 7.2 percent decline in orders, as reported by Xinhua news agency, citing the Federal Statistical Office.
Carsten Brzeski, global head of macro at ING Research, remarked that industrial orders have been on a downward trend throughout the past year, averaging a 1 percent month-on-month decline since the beginning of 2024.
The data released on Wednesday also revealed that orders from outside Germany plummeted by 10.8 percent in November compared to the previous month, with orders from non-eurozone countries decreasing by nearly 15 percent.
Brzeski pointed out that weak demand coupled with high inventories obscures the outlook for industrial production in the upcoming months. Although the sector may have reached its nadir, there are no definitive indicators of a recovery for Germany's industrial economy.
The manufacturing sector in Germany, which accounts for more than one-fifth of the nation's total gross value added, has been grappling with persistent hurdles in recent years, stalling economic growth. The German economy is projected to contract slightly in 2024, marking the second consecutive year of decline.
