Amid gloomy economic growth figures, German manufacturers have seen their first monthly increase in orders in six months.
The German Federal Statistical Office (Destatis) announced on August 6th that industrial orders in Europe's number one economy increased by 3.9% compared to the previous month. Analysts had expected a much smaller increase of 0.5%.
For industry – the backbone of the German economy – the increase in June was driven by domestic orders, which rose 9.1%, Destatis said. Demand from abroad increased by only 0.4%.
The automotive industry remains a key driver of Germany's economic growth. Photo: Getty Images
Regardless, this is good news not only for manufacturers but also for an economy teetering on the brink of a technical recession, having contracted by 0.1% in the second quarter of 2024, impacting economic sentiment. Since a technical recession is defined as two consecutive quarters of GDP decline, the third-quarter figures will be crucial.
The automotive industry remains the main driver.
According to Destatis, orders in the automotive manufacturing sector increased by 9.2% in June, keeping the industry a key driver of growth in the German economy.
Companies manufacturing metal products and those involved in the construction of aircraft, ships, and trains also saw a 12% increase in orders. However, in the computer, electronics, and optics sector, the number of orders decreased by 7.9%.
According to the latest data from Destatis, this figure would be lower, at 3.3%, without some large-scale orders, which can be highly volatile.
A year-on-year comparison reveals fewer reasons for optimism in the industry, with orders down 11.8% compared to the same period last year (June 2023).
The German Ministry of Economics said that although recent manufacturing figures show improvement, industry is expected to remain sluggish due to pessimistic business expectations in the manufacturing sector.
"Given the persistently low level of overseas orders, we do not expect a broad-based economic recovery in the near future," the ministry said.
"There's no reason to assume everything is alright."
The German government 's assessment also aligns with the views of experts. Economist Jupp Zenzen from the German Chamber of Commerce and Industry (DIHK) also stated that, despite the increase in orders in June, "unfortunately, there is no reason to assume that everything is fine." The expert called the first half of 2024 a "disappointment" in general.
"German industry is at risk of losing competitiveness due to a number of structural problems, such as high costs, bureaucratic procedures and a shortage of skilled labor," said Zenzen, adding that energy prices also remain a concern.
Destatis said orders in the second quarter of this year, from April to June, fell 1.4% compared to the previous quarter (Q1 – from January to March).
Given the significant declines in previous months, the June increase may only be a bottoming-out rather than a sustainable trend, according to HSBC economist Anja Sabine Heimann.
"The pressure on industrial producers remains high, and capacity is unlikely to expand in the near future. Therefore, we expect to have to wait for a solid recovery in German manufacturing for some time longer," Ms. Heimann noted.
Minh Duc (Based on DW, WSJ, Xinhua)
Source: https://www.nguoiduatin.vn/kinh-te-duc-nhan-tin-tot-nhung-van-chua-the-lac-quan-204240808210238082.htm
