After two consecutive monthly increases, German factory orders weakened in May. On a monthly basis, German factory orders dropped by 2.3%, reversing the previous month’s increase. The consensus was looking for a more moderate decline by 1.0% M/M.
The breakdown shows that weakness was broad-based. Both domestic (-3.2% M/M) and foreign (-1.5% M/M) orders fell back in May. Within foreign orders, especially orders from
euro zone countries (-3.6% M/M) weakened sharply, while non-euro zone orders (-0.2% M/M) fell only slightly. Orders for intermediate (-1.9% M/M) and capital (-3.6% M/M) good dropped sharply, which was partly offset by a 7.5% M/M rebound in consumer goods. After two strong months, German factory orders fell back in April, indicating again that the recovery remains uneven as demand from other
euro zone countries remains poor.