German Factory Orders Unexpectedly Rise In May

(RTTNews) - Germany's factory orders unexpectedly expanded in May underpinned by the rise in demand from the non-euro area countries, data from Destatis showed on Wednesday.

New orders grew 0.1 percent month-on-month in May, in contrast to the revised 1.8 percent decline in April and the expected fall of 0.6 percent.

On a yearly basis, factory orders declined 3.1 percent, slower than the April's 5.3 percent decrease.

Foreign orders gained 1.3 percent on month driven by the 3.7 percent rise in demand from the non-euro area countries. Meanwhile, orders from the euro area fell 2.4 percent.

At the same time, domestic orders registered a decrease of 1.5 percent on the previous month.

The producers of capital goods logged an increase of 3.3 percent. Meanwhile, orders for intermediate goods and that for consumer goods dropped 3.2 percent and 4.5 percent, respectively.

Data showed that manufacturing turnover grew at a faster pace of 3.2 percent on month, following a revised 0.6 percent rise in April. On a yearly basis, manufacturing turnover was up 1.0 percent.

Destatis said the volume of new orders was higher than the volume of turnover in May, as in the preceding months. The excess demand reflects the continuing acute shortage of intermediate products.

Firms continued to face difficulties in completing their orders as supply chains are still interrupted because of the war in Ukraine and distortions caused by the Covid-19 crisis, such as the closure of ports in China, Destatis said.

Elsewhere, a survey conducted by the ifo Institute revealed that German retailers are bracing themselves for supply problems to persist for another full year. Nearly 76 percent of retailers complained that they did not receive all the goods they ordered, but below 80.1 percent reported in May.