Germany Factory Order Growth Exceeds Expectations

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

Factory orders grew 2.8 percent on a monthly basis, but slower than the 3.6 percent expansion seen in November. Economists had forecast the growth rate to ease sharply to 0.5 percent. This was the second consecutive rise in orders. Excluding major orders, factory orders were up 2.9 percent.

On a yearly basis, growth in new orders accelerated to 5.5 percent from 2.3 percent in the previous month.

Domestic orders were up 11.7 percent, while foreign orders dropped 3 percent from the previous month. Within foreign demand, incoming orders from the euro zone fell 4.2 percent and that from the rest of the world decreased 2.3 percent.

Producers of intermediate goods reported a 4.1 percent rise in orders and the producers of capital goods recorded an increase of 1.8 percent. Regarding consumer goods, orders went up 5.3 percent.

In the whole year of 2021, new orders were up 17.8 percent from a year earlier and 9.3 percent higher than in the pre-crisis year 2019.

Further, data showed that real manufacturing turnover was up 0.2 percent from November, when it grew by revised 4.3 percent.

Elsewhere, survey results from IHS Markit showed that the German construction sector grew at the fastest pace in almost two years in January.

The construction Purchasing Managers' Index rose to 54.4 in January, up sharply from 48.2 in December.

The result pointed to the strongest growth since February 2020, and partly reflected less weather-related disruption than usual during the month, underlying data suggested.