Analysts warn that the EU’s largest economy could suffer another recession.
New orders for industrial products manufactured in Germany suffered their biggest drop since the start of the year in August, according to the latest provisional data published on October 7, 2024 by the statistics institute Destatis.
Manufacturers’ orders fell 5.8% in August from the previous month and 3.9% year-over-year. These figures exceeded analysts’ forecasts, which expected a drop of 1.9%.
Destatis attributes the severity of the monthly decline to the high base effect of the previous month, when large orders were placed in so-called “other vehicle manufacturing” (manufacturing of aircraft, ships , trains, military vehicles). Excluding this segment, incoming orders decreased by only 3.4%.
Orders for capital goods and intermediate goods fell by 8.6% and 2.2% respectively in August compared to July. While incoming orders for consumer goods fell by 0.9%, according to Destatis.
The breakdown of orders from outside the euro zone shows an increase of 3.4%. While orders from Eurozone countries fell by 10.5%. Domestic orders fell 10.9%.
The European Commission expects the German economy to stagnate this year (2024). Persistent inflation, high energy prices and weak foreign demand are cited as reasons for the slowdown.
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