Carsten Brzeski's blog

Germany: Industrial stabilization

New orders grow for second month in a row, suggesting that industrial production could finally pick up some speed

German new orders continued the recent upswing with a solid 1.0% MoM increase in March, from 3.5% in February. It’s the first time since November 2015 that new orders increased for two months in a row. On the year, industrials orders were up by 2.3%. The March increase was mainly driven by a sharp improvement in foreign orders. Demand for capital and consumer goods grew by 3.7% MoM and 5.5% MoM respectively.

Obviously, new orders are highly volatile but today’s figures suggest that the sharp fall in new orders at the start of the year was mainly the result of seasonal effects and technical corrections. In fact, combined with buoyant confidence indicators today’s new orders data suggest that industrial production could finally gather some momentum. There is increasing evidence that contrary to previous cycles industrial production could be the lagging factor of the current positive economic expansion.