06.04.202009:53:00UTC+00German Factory Orders Decline Less Than Expected

Germany's factory orders declined at a slower-than-expected pace in February on robust domestic demand as the initial impact of the coronavirus pandemic was mild, data from Destatis revealed Monday.

Factory orders fell 1.4 percent month-on-month in February after rising by a revised 4.8 percent in January. Orders were expected to fall 2.5 percent after January's initially estimated 5.5 percent decrease.

Domestic orders grew 1.7 percent, while foreign demand fell 3.6 percent in February from the previous month. New orders from the euro area dropped 5 percent and those from other countries decreased 2.7 percent.

The economy ministry said orders slumped in March and April due to the global economic shock caused by the coronavirus, or Covid-19, pandemic.

"In pre-Covid-19 days, German industry had already been in a free fall," Carsten Brzeski, an ING economist said. "The very tentative signs of a bottoming out at the turn of year currently seem far far away."

As Covid-19 affects the economy through multiple channels, the latest industrial orders data look to be "just another eerie calm before the storm", the economist added.

On a yearly basis, factory orders grew 1.5 percent in February, in contrast to a 0.8 percent drop in January. Economists had forecast a marginal drop of 0.2 percent.

Data showed that manufacturing turnover edged up 0.1 percent in February, but was slower than the 1.1 percent increase seen in January.

Elsewhere, survey data from the ifo Institute showed that business expectations in the automobile industry declined sharply in March. The corresponding index fell to -33.7 from -19.7 in February.

The survey showed that export expectations in the industry plunged to the lowest since March 2009.

On Monday, the industry group BDI predicted that the Germany economy is set to shrink 3-6 percent this year.