German factory orders unexpectedly slump in May
German factory orders unexpectedly slumped in May amid weakness in the auto sector, according to figures released on Tuesday by Destatis.
Factory orders fell 3.7% on the month following a 1.2% increase in April, missing expectations for a 0.9% rise.
On the year, factory orders rose 54.3% in May following an 80.2% jump the month before and versus expectations for a 59.4% increase.
Compared to February 2020, a month before Covid-related restrictions kicked in, order intake in May was 6.2% higher. Compared to May 2020, which was "very badly" affected by the pandemic, order intake rose 54.3%.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "This is a terrible number, even factoring-in the significant upward revision to the April data. The headline was depressed by a 6.7% month-to-month plunge in export orders, mainly due to weakness in demand from non-eurozone economies, down by 9.3%, while new orders to other eurozone economies slipped by 2.3%.
"Domestic orders rose by 0.9%. Across sectors, new orders for intermediate and capital goods slumped by 3.6% and 4.6%, respectively, while demand for consumer goods snapped back, rising by 3.9% after a 2.4% decline at the start of Q2. Usually, big declines in this headline are driven by major orders, but on this occasion they’re not to blame.
"New orders fell by 3.7%, excluding major orders, the same as the aggregate headline. Weakness in the auto sector was a key driver."