Strikingly low demand observed in the business sector.
The ongoing struggle: The industrial sector in Germany has experienced a steady drop in orders since the beginning of the year. April didn't offer the anticipated upturn. The Economy Ministry remains hopeful for recovery starting in the summer, but economists are split about it.
German industry's plight: In April, the Federal Statistical Office revealed a disappointing fourth consecutive fall in orders. This marked a contraction of 0.2% compared to last month. Economists who were surveyed by Reuters had predicted a 0.5% increase.
The Federal Ministry of Economics commented, "This continues the stubbornly negative trend, though it has significantly weakened". March saw a 0.8% decline, February had a 0.9% drop, and January had a whopping 10.8% fall. Domestic orders went down 0.3% while foreign orders decreased 0.1% in April.
Without the highly volatile major orders, one would have seen a 2.9% growth in April. "There's optimism that the German economy will gradually recover from the summer," stated Commerzbank's Chief Economist, Jörg Krämer. The Economy Ministry highlighted improved sentiment indicators, "which may also result in a reversal of order intake". But contrary to this, VP Bank's Chief Economist, Thomas Gitzel argues, "As long as order intake doesn't grow markedly, the German economy won't get back on its feet."
Diverse fortunes
Industries that had a strong month and those that had a tough one
The market had a varying response across different sectors. Manufacturers of vehicles such as aircraft, ships, and trains faced a 15.4% decline. Those producing data, electronic, and optical equipment (-5.1%) and electrical equipment (-4.1%) also battled less demand. Conversely, textile manufacturers (+10.9%) and the auto industry (+4.1%) gained momentum, and metal processors enjoyed a 3.3% increase.
The marked turnover decline was evident in the processing sector: This fell by 0.9% after adjusting for inflation in April compared to the previous month. March had shown a decrease of 0.4%.
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The textile industry, despite facing challenges in other sectors, experienced a notable 10.9% increase in orders, showcasing some resilience within the struggling German industry. On the other hand, the car industry, including manufacturers of automobiles, faced a significant 15.4% decrease in orders, continuing the trend of low demand in the business sector.
