German Manufacturing Orders Drop in October 2024

According to the Federal Statistical Office (Destatis), real (price-adjusted) new orders in the German manufacturing sector declined 1.5% in October 2024 compared to the previous month after adjusting for seasonal and calendar effects. This decrease, however, masks some underlying trends, as new orders excluding large-scale projects saw a slight increase of 0.1% from September.

Despite the month-on-month drop, new orders in October 2024 were up by 5.7% compared to the same month a year earlier, continuing the overall growth trajectory observed in the manufacturing sector. This marked a positive year-on-year development, although October’s performance was heavily influenced by large-scale orders, particularly in the shipbuilding sector.

Looking at a three-month comparison, new orders from August to October 2024 increased by 2.7% compared to the previous three-month period. However, excluding major orders, the growth was more modest at just 0.7%. The revision of September’s figures also highlighted a stronger-than-expected performance, with new orders rising by 7.2% from August (compared to the provisional estimate of 4.2%), largely driven by a significant order in ship manufacturing.

The manufacturing sector experienced varying results across different industries. Notably, machinery and equipment production saw a significant drop of 7.6% in new orders, while the automotive industry also recorded a decline of 3.7%. On the other hand, the production of basic metals saw an impressive growth of 10.2%, and computer, electronic, and optical products rose by 8.0%.

Sector-wise, intermediate goods saw a modest increase in orders, rising by 0.9%, while consumer goods grew by 4.2%. In contrast, the capital goods sector experienced a 3.6% decline in new orders, reflecting a broader softness in investment-oriented industries.

German Manufacturing Orders Drop in October 2024

New orders dropped by 5.3% on the domestic front, while foreign orders showed a slight overall increase of 0.8%. Within foreign markets, orders from the euro area saw a substantial decline of 7.6%, contrasting with a 6.3% rise in orders outside the euro area.

In terms of turnover, real manufacturing turnover in October 2024 (seasonally and calendar adjusted) decreased by 1.2% compared to September. Year-on-year turnover for October was also down by 3.9%, further highlighting manufacturers’ challenging environment. The revised figures for September 2024 showed a smaller decline of 1.1%, down from an earlier provisional estimate of -1.4%.

These developments suggest that while the manufacturing sector continues to show resilience in certain areas, it faces challenges in others, particularly with weaker domestic demand and reduced large-scale orders.

The data for October 2024 paints a mixed picture of the German manufacturing sector. Despite the month-on-month decline in new orders, the year-on-year growth remains robust, and the three-month trend points to a moderate recovery. However, sectoral disparities and fluctuations in large-scale orders, such as those in shipbuilding, suggest that the outlook for the coming months remains uncertain, especially in light of ongoing domestic and international economic challenges.

Also, for analysis and updates, visit FXAN to stay informed on the latest news and insights. Also, follow us on Instagram.