Germany: manufacturing orders increase. Recovery or “Dead Cat”?

Orders to German industry are increasing, but there is the impression that it is the "dead cat bounce"…

Manufacturing orders in Germany rose 3.9% in August 2023 , following a slump of 11.3% in July, beating forecasts for an increase of 1.8%. Excluding large-scale orders, new orders also increased by 3.9%.

The largest contribution to the increase came from the computer, electronic and optical products manufacturing sector, which recorded a surge of 37.9%, in particular with regard to orders of electronic components intended for the domestic and foreign markets.

Other increases were recorded for electrical equipment (8.7%), pharmaceutical products (4%), intermediate goods (9.3%), consumer goods (8.8%) and capital goods (0. 1%).

Orders from the automotive industry, however, decreased by 0.7% . Meanwhile, foreign orders increased by 3.9% and domestic orders by 4%. The less volatile three-month-on-three-month comparison showed new orders increased 4.9% in the June to August period compared to the previous three months.

Here is the relevant graph:

The increase in orders is almost entirely linked to a single sector: computers, electronics and optics. Such a boom could be linked to temporary factors, such as, for example, a large order from a public administration or a state. An increase in orders of this kind is unlikely to be repeated in September.

So this rebound could be temporary and linked to transitory reasons. In short, are we facing the “Dead Cat Rebound” or a real revival of German industry? I think the former is more likely, but we'll know in a month.

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The article Germany: manufacturing orders increase. Recovery or “Dead Cat”? comes from Economic Scenarios .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-aumentano-gli-ordini-manifatturieri-ripresa-o-gatto-morto/ on Fri, 06 Oct 2023 20:23:42 +0000.