FRANKFURT: German industrial orders fell sharply in May, hit by weak demand from abroad as the pandemic continued to pummel Europe’s top economy, official data showed Tuesday. Orders were down by 3.7 percent, according to the federal statistics office Destatis, dashing the hopes of analysts polled by Factset who had pencilled in a rise of 0.8 percent compared to April.
However, a year-on-year comparison showed a whopping 54.3 percent increase compared to May 2020, when the economy came to a screeching halt during the first wave of the global pandemic.
International orders in May sank particularly sharply, by 2.3 percent from eurozone countries and 9.3 percent from the rest of the world according to month-on-month data. Industrial orders are closely watched as a key indicator of future economic activity, especially in manufacturing powerhouse Germany.
Germany’s economy shrank in the first quarter as restrictions were imposed to counter a winter surge in Covid-19 cases.
But ING analyst Carsten Brzeski suggested the disappointing May industrial orders data should be taken with a “pinch of salt”. He noted that “ongoing supply chain disruptions, delivery delays and lack of materials and intermediate goods” due to the pandemic have “blurred the traditional link between industrial orders and production”.