Industrial orders in Germany bounced back in May after a string of setbacks, official data showed Thursday, suggesting Europe’s largest economy may not face the sharp slowdown some observers feared.
New contracts at industrial firms grew 2.6 percent month-on-month in May, federal statistics authority Destatis said in figures adjusted for price, seasonal and calendar effects.
The performance beat expectations from analysts surveyed by data company Factset, who had forecast 1.1 percent growth after four months of slips in a row.
Orders from within Germany grew 4.3 percent and demand from the country’s neighbours in the 19-nation eurozone added 6.7 percent.
But contracts from the rest of the world fell by 1.3 percent.
Meanwhile in different manufacturing sectors, consumer goods and capital goods firms saw both saw orders increase just under 5.0 percent, while demand for producer good fell back slightly.
Thursday’s positive data were ‘more evidence that the economy could rebound during the second half of the year,’ ING Diba bank economist Carsten Brzeski commented.
Expansion in Germany halved quarter-on-quarter to 0.3 percent between January and March, while confidence among consumers, investors and business leaders has fallen back from the euphoric levels seen in late 2017.
But with a string of one-off knocks to the economy from winter weather to a flu outbreak and and unfavourable holiday calendar, ‘it will take until June before the economy will finally show its real face,’ Brzeski said.
Explaining the slowdown in the first half of the year, the economy ministry in Berlin pointed to ‘weakness in the global economy and uncertainty over trade’ as US President Donald Trump has lashed out at China and the European Union with tariffs.
But ‘the business situation in industry should be on a slight upward trend in the coming months,’ the government economists predicted.