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German factory orders fall more than expected in December

By Michele Maatouk

Date: Friday 05 Feb 2021

LONDON (ShareCast) - (Sharecast News) - German factory orders fell more than expected in December as coronavirus lockdowns took their toll, according to figures released by Destatis on Friday.
Orders fell by 1.9% on the month following a revised 2.7% decline in November, coming in worse than expectations for a 1% drop.

On the year, factory orders rose 6.4% in December following a 6.7% increase the month before, and compared to expectations for a 4.1% jump.

Compared with February 2020, the month before coronavirus restrictions were imposed, new orders were 2.6% higher.

Domestic orders fell 0.9% and foreign orders were down 2.6% on the previous month. New orders from the eurozone fell 7.5%, while orders from other countries ticked up 0.5% compared with November 2020.

The manufacturers of intermediate goods saw new orders rise 0.8% compared with November and capital goods makers saw a 4.6% decline. Manufacturers of consumer goods saw a 6.4% increase in new orders.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "The upturn in German new orders suffered a minor setback at the end of 2020, but an underlying trend of 6-to-7% year-over-year is robust all the same.

"In total, the December data are the first evidence of a setback in the uninterrupted acceleration in new orders growth since summer, consistent with recent softness in the survey. That said, an underlying trend of 6% year-over-year is solid, and it should be enough to deliver a further robust gain in both production and new orders through Q1.

"Note finally that industrial turnover rose in December, by 1.9%, which is usually a better short-term lead on the headline production numbers than factory orders. It indicates that Monday's industrial production report will be decent, we now think that production, ex-construction, edged higher by 1-to-1.5%."