German industrial orders jump on renewed domestic demand

BERLIN: German industrial orders climbed for the second month in a row in February on resurgent domestic demand despite a drop in orders from abroad, official data showed Thursday.

Orders rose by 1.2 percent month-on-month, federal statistics office Destatis said in seasonally adjusted figures, slightly exceeding the 1.0 percent forecast by financial services provider Factset.

Compared with February 2020, new orders were up by 5.6 percent, Destatis said.

The month-on-month February increase was driven by a surprise 4.0 percent jump in orders from within Germany, Destatis said, with domestic demand resurgent despite ongoing coronavirus restrictions in Europe's biggest economy.

Industrial orders are closely watched as a key indicator of future economic activity, especially in manufacturing powerhouse Germany.

The February jump comes after a 0.8 percent rise in January, revised down from the initial Destatis estimate of 1.4 percent.

"Orders in the manufacturing sector continue their upwards trend...and exceeded February 2020 levels for the fifth month in a row," the economy ministry said in a statement, singling out strong demand in car production and machine-tool making.

German industrial orders plummeted during the first wave of the pandemic last March and April before recovering as global lockdowns eased.

Yet as the country reimposed restrictions on public life from November, the industrial sector had in recent months become more reliant on foreign demand, and especially on orders from the Chinese market.

February's figures appear to buck that trend, with domestic demand rising by 4.0 percent and orders from abroad dipping slightly by 0.5 percent.

The drop in export demand was largely driven by a 2.3 percent reduction in orders from outside the eurozone, while orders from within the currency bloc rose by 2.7 percent.