German Industrial Orders Bounce Back on Strong Foreign Demand

By Reuters
January 6, 2022 Updated: January 6, 2022

BERLIN—Higher demand from abroad drove a bigger-than-expected rebound in German industrial orders in November, in rare good news for manufacturers suffering from supply bottlenecks and labor shortages in Europe’s largest economy.

Goods orders rose 3.7 percent on the month in seasonally adjusted terms after a revised drop of 5.8 percent in October, figures from the Federal Statistics Office showed on Thursday. A Reuters poll of analysts had pointed to a 2.1 percent rise.

The rise was driven by a surge in foreign demand for capital and intermediate goods, with orders from other euro zone countries jumping 13.1 percent and bookings from clients outside the single currency bloc up 5 percent.

“This provides a positive impetus for the economic outlook, although economic activity continues to be burdened by existing delivery bottlenecks,” the economy ministry said.

In contrast to previous months, orders for large-ticket items such as planes did not have a big impact on the headline figure in November. Excluding this special factor, industrial orders rose 3.8 percent on the month, the ministry said.

“The upturn in foreign business is particularly encouraging, especially since delivery bottlenecks seem to be easing,” said Alexander Krueger, an analyst with private bank Hauck Aufhaeuser Lampe.

But Krueger cautioned that supply chain problems would likely persist well into spring, until delivery logistics functioned more smoothly again.

Economic institutes expect the German economy to have shrunk in the final three months of 2021 and to stagnate in the first three months of 2022, delaying the recovery from the COVID-19 pandemic.

By Michael Nienaber