German Factory Orders Growth Tops Expectations

Germany's factory orders growth exceeded expectations in January underpinned by robust foreign demand, data from Destatis revealed on Friday.

Factory orders expanded 1.4 percent month-on-month in January, reversing a revised 2.2 percent fall in the previous month. Orders were forecast to climb 0.7 percent. Domestic orders dropped 2.6 percent, while foreign demand grew 4.2 percent in January. New orders from the euro area advanced 3.9 percent, and that from other countries gained 4.4 percent from December.

Excluding major orders, real new orders in manufacturing were 2.8 percent higher than in the previous month.

On a yearly basis, factory orders growth slowed to 2.5 percent from 6.1 percent in the prior month.

Today's data suggest that the industrial-strength will continue in 2021, Carsten Brzeski, an ING economist said. Soft indicators had already pointed in that direction and now hard data confirm the divergence between the manufacturing and services sector.

The latest Purchasing Managers' survey results also showed a strong and accelerated growth in Germany's manufacturing sector, driven in part by robust demand from abroad. The PMI rose steeply to a 37-month high of 60.7 in February from 57.1 in January.

Data showed that turnover in manufacturing decreased 1.1 percent in January after rising 2 percent in December.