German Industry Facing Many Setbacks
German industry received fewer orders in December than the month before. According to ING economists, this suggests that the stricter lockdown in Germany and continued lockdowns in other eurozone countries have now also hit the industry of the largest eurozone economy.
They speak of a “setback” for the industry of the eastern neighbours.
The decline in factory orders was 1.9 percent. This is the first decrease after seven months of increase. On average, economists had already taken into account a reduction, but not such a sharp decline. In November, factory orders rose by an adjusted 2.7 percent.
German industrial companies received fewer orders, especially from neighbouring countries. Domestic demand was also weak. New orders from outside the eurozone, on the other hand, increased slightly. Factory orders were still 6 percent above pre-crisis levels in December.
German industry was hit very early in the corona crisis when orders from China fell. After that, the sector got through the corona crisis in Europe relatively well, the experts at ING indicate. They point out that the December decline could mean a temporary pause for breath, but it could also be more serious.
“With the Chinese New Year interrupted and ongoing lockdowns at many major trading partners, setbacks seem difficult for the industry to avoid,” said the economists.