05.05.202308:13:00UTC+00Germany Factory Orders Fall Most Since Onset Of Pandemic

German factory orders posted the biggest decline since the onset of the coronavirus pandemic in 2020, suggesting that manufacturing weighed on the economic activity in the first quarter.

Factory orders decreased by a more-than-expected 10.7 percent month-on-month in March, offsetting the revised 4.5 percent increase in February, data released by Destatis showed on Friday. Orders were forecast to drop moderately by 2.2 percent.

Excluding large-scale orders, there was a decrease of 7.7 percent in March from the preceding month.

In March, foreign orders plunged 13.3 percent and domestic orders decreased 6.8 percent.

Orders for construction of ships, aircrafts and spacecrafts plunged 47.4 percent. This was in stark contrast to the 55.0 percent increase in February.

Motor vehicles and auto parts also had a notable impact on the results, down 12.2 percent on the previous month.

New orders in the capital goods industry posted a monthly decrease of 14.1 percent and that of intermediate goods dropped 7.5 percent. On the other hand, orders for consumer goods gained 1.2 percent.

In the first quarter, new orders were 0.2 percent higher than in the same period of previous year.

Further, data showed that manufacturing turnover decreased 2.9 percent over the month, reversing an increase of 1.5 percent in February. Turnover was 3.7 percent higher than in March 2022.

Germany avoided a recession in the first quarter as the economy stagnated with the fall in household and government spending offsetting the improvements in capital formation and exports.

After contracting 0.5 percent in the fourth quarter, gross domestic product remained flat in the first quarter.

The International Monetary Fund forecast the German economy to shrink 0.1 percent this year and to expand 1.1 percent in 2024.