German factory orders beat forecasts

German factory orders beat expectations in March as Europe's biggest manufacturing sector continued to recover from the Covid-19 crisis.

New manufacturing orders rose 3% in March as business accelerated from a revised 1.4% increased in February, Destatis said. Analysts had on average expected orders to increase 1.5% month-on-month.

Orders jumped 27.8% from a year earlier and were up 9.1% from February 2020, the month before Covid-19 restrictions were imposed. Excluding major orders, factory orders rose 1.6% from the previous month.

New orders in the domestic economy jumped 4.9% and export orders rose 1.5%. An 8.5% jump in orders for consumer goods was one of the main reasons for the headline increase, combining a 10% increase in export orders and a 4% rise in domestic orders. Demand for capital and intermediate goods rose 2.5% and 2.8% respectively, driven mainly by domestic demand.

The figures show Germany's manufacturers powering ahead, helping to offset weakness in the rest of the economy. Official figures on Friday showed the German economy slipping back into contraction in the first quarter as services and construction were affected by a VAT increase and the reimposition of Covid-19 restrictions.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "Demand in German manufacturing was still rising briskly at the end of Q1, though on this occasion, major orders—mainly in transport equipment—flattered the headline."