German industry recorded unexpectedly strong growth in orders in December - but financial experts reacted cautiously

German industry recorded unexpectedly strong growth in orders in December - but financial experts reacted cautiously

According to a report by www.tagesschau.de,

German industry recorded a surprisingly large increase in orders in December, primarily due to aircraft orders. This saved the overall balance, which would otherwise have been weak. The Federal Statistical Office reports that new business increased by 8.9 percent compared to the previous month, which surprised many economists. Large orders in various industries, particularly in the area of ​​other vehicle construction such as aircraft, ships and trains, have led to this increase.

Car manufacturing, on the other hand, recorded a sharp decline, which is of considerable importance as this sector is one of the most important in German industry. There were also declines in mechanical engineering and the chemical industry.

Despite the large increase in orders, there is a downward trend in German industry. Analysts warn against being overly positive about the data. They say that without major orders, the industry remains weak and a significant recovery is still pending. In the fourth quarter of 2023, total order intake was only 0.1 percent higher than in the previous three months, despite the strong December. For the year as a whole, it was 5.9 percent lower than in the previous year.

The Ifo Institute also warns of a persistent lack of orders in industry, which could increasingly become a burden on the German economy. According to their monthly survey, 36.9 percent of industrial companies reported a lack of orders in January.

Overall, this suggests that German industry continues to face challenges and that a sustainable recovery and strengthening of market activity is still pending.