German industry shows positive signs as new orders rise

BERLIN, Aug. 6 (Xinhua) — Germany’s industrial sector showed positive signs of recovery, with new manufacturing orders increasing 3.9 percent in June from the previous month, ending a five-month downward trend, according to official data released on Tuesday.
The increase was primarily driven by a 9.1 percent surge in domestic orders while foreign orders increased by 0.4 percent. Orders from the euro area decreased slightly and those from non-euro areas saw a modest increase, the Federal Statistical Office reports indicate.
After a decline in May, the positive development of new industrial orders in June was largely attributed to a 9.3 percent month-on-month growth in the automotive industry, marking a notable rebound for this crucial sector of Europe’s largest economy.
However, quarterly manufacturing orders in Germany were 1.4 percent lower in the second quarter (Q2) compared to the first three months of the year.
Germany’s Economics Ministry said Tuesday that the recent uptick in domestic orders and the lending survey results from the European Central Bank showed that the companies have increased investment intentions for the second half of the year.
Nevertheless, the ministry cautioned that a broader recovery in the industrial sector remains unlikely in the short term due to persistently low business sentiment and weak external demand.
Following a 0.1 percent economic contraction in Q2, primarily driven by weak manufacturing growth, German industrial enterprises are reported to be considering relocation abroad.
A survey of 3,300 companies by the German Chamber of Industry and Commerce revealed last week that 37 percent of industrial companies are contemplating reducing production in Germany or moving abroad. This proportion is up from 32 percent in 2023 and 21 percent in 2022. The survey attributed this trend to rising costs and unpredictable energy supplies, significantly impacting production and investment in Germany. ■