Dhe German industry received slightly more orders in May. Compared to April, orders increased by 0.1 percent, as the Federal Statistical Office announced on Wednesday in Wiesbaden. It’s the first increase in three months of declines. Analysts, on the other hand, had expected a further minus of 0.5 percent. The decline in the previous month was corrected from 2.7 to 1.8 percent. Compared to the same month last year, orders in May were down 3.1 percent.
The overall development was supported by major orders. Without this component, orders would have fallen by almost one percent. All in all, 1.3 percent more orders came from abroad, but 2.4 percent fewer from the euro zone. Domestic demand was weak, falling 1.5 percent. According to goods groups, only orders for capital goods such as machines increased. Intermediate and consumer goods, on the other hand, were ordered less than in the previous month.
Despite the slight increase in orders, the Federal Ministry of Economics was cautious: “The outlook for industrial activity in the coming months remains cautious given the high level of uncertainty caused by the war and the threat of Russian gas supply stops.” Due to its high dependence on Russian natural gas supplies, Europe is particularly vulnerable to an energy crisis that could trigger a deep recession.
Bank economists were also rather pessimistic. “Anyone looking for signs of a recession will find what they are looking for in the incoming orders,” commented Thomas Gitzel, Chief Economist at VP Bank. The small plus in May is due solely to the increase in orders from major orders. These are not good omens. “As harsh as it sounds, there is probably no avoiding a recession.”
Commerzbank expert Ralph Solveen painted a little less black. The trend in incoming orders is clearly pointing downwards. “For the development of production, however, this currently only plays a subordinate role.” Production depends more on the scarce primary products than on new orders. Industrial production and the German economy as a whole could pick up modestly in the second quarter, Solveen said.
