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Will German companies be forced to reduce production with orders down?

This aerial view shows cargo vessels at the plant of German industrial conglomerate ThyssenKrupp in Duisburg, western Germany
This aerial view shows cargo vessels at the plant of German industrial conglomerate ThyssenKrupp in Duisburg, western Germany Copyright INA FASSBENDER/AFP or licensors
Copyright INA FASSBENDER/AFP or licensors
By Greta Ruffino
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The latest industrial data from Germany has been released and shows a decline in manufacturing orders.

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Industrial orders in Germany fell more than expected in October, declining by 3.7% on the previous month, according to latest data from Destatis, the federal statistics office.

Analysts, according to a Reuters poll, had expected a rise of 0.2%, following a revised 0.7% increase in September.

"Within manufacturing, much of the month-on-month decrease in October 2023 was due to the performance of the "manufacture of machinery and equipment" sector, where new orders declined by 13.5% after seasonal and calendar adjustment (in September 2023, new orders had risen by 9.8% in this sector)," a press release said.

Destatis also noted, in addition, new orders were down in major sectors, that is, in the manufacture of fabricated metal products (except machinery and equipment), the manufacture of basic metals, the manufacture of electrical equipment and the automotive industry. 

"This also negatively impacted the overall result in October 2023. By contrast, the 20.2% increase in new orders in the manufacture of other transport equipment (aircraft, ships, trains, etc.) had a positive impact. The sharp increase was due to large-scale orders received in this sector," the press release also highlighted.

Commerzbank economist Ralph Solveen. told Reuters: "So far, many companies have compensated for the lower order intake by working off their order backlogs.

"In the long term, however, they will not be able to avoid reducing their production, which suggests that the German economy will continue to shrink in the winter months," he added.

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