New orders at German factories rose markedly in February, posting its third increase in as many months, a sign that demand for manufacturers recovered somewhat after a significant downward trend for most of 2022.
Manufacturing orders increased 4.8% in February on month after rising by a revised 0.5% in January, according to price-adjusted data released Wednesday by the German statistics office Destatis.
The reading beats economists’ consensus forecast of a 0.2% decline in a poll by The Wall Street Journal.
The increase in orders was driven by a 55.9% rise in the miscellaneous vehicle construction sector–which includes ships, rail, aircraft, spacecraft and military vehicles–and also a 3.7% expansion in the motor-vehicle manufacturing sector, Destatis said. Excluding the more volatile component of large-scale orders, the rise was of 1.2%.
Domestic orders rose 5.6% on month while foreign orders rose 4.2%, the data showed.
Despite recent gains, manufacturing orders were 5.7% below the levels registered the same month a year earlier.
Germany’s manufacturing sector is benefiting from normalizing energy prices and easing supply-chain bottlenecks, but faces a tough outlook as rapidly increasing interest rates weigh on future demand.
Data from a purchasing managers survey showed new orders at German factories declined in March as customers refrained from placing orders due to low confidence, rising borrowing costs and a desire to run down inventories.
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