BERLIN -German industrial orders fell more than expected in February on weaker demand from abroad, data showed on Wednesday, as supply shortages and exploding energy prices subdue manufacturing activity and Russia’s invasion of Ukraine clouds the outlook.
Orders for industrial goods fell 2.2% on the month in seasonally adjusted terms after an upwardly revised increase of 2.3% in January, figures from the Federal Statistics Office showed.
A Reuters poll of analysts had pointed to a drop of 0.2% on the month in February.
A breakdown of the data showed that foreign orders fell by 3.3%, as demand for both intermediate and capital goods was down by 1.9% and 2.8% respectively. Consumer goods orders were up by 0.7%.
“The drop in orders in February should be seen in view of the sharp rise in the previous month,” the economy ministry said in a statement. “An impact of Russia’s war in Ukraine is hardly reflected in the data. Yet the war is causing high uncertainty especially on future demand.”
Joerg Kraemer, chief economist at Commerzbank AG, said in a note the drop was no “drama” coming on the heels of a sharp rise in demand in January but the main challenges for manufacturers were shortages of raw material and supply bottlenecks.
“In the coming months, the challenge for manufacturing will be less about demand and more about the availability of raw materials, which has worsened given the war in Ukraine and rigid (COVID-19) lockdown policies in China.”