German industrial orders rise more than expected in May

German industrial orders saw a stronger-than-expected rebound in May, offering a much-needed boost to the nation's struggling manufacturing sector. Orders rose by a seasonally and calendar-adjusted 1.9% compared to April, surpassing the 1% increase predicted by economists surveyed by Bloomberg.

The positive figures also came with a revision to April's data, showing a smaller decline of 3.2% instead of the initially reported 3.8%. This suggests the downturn in the industrial sector may not have been as severe as previously feared.

“

For the German economy, these are not easy times. The automotive industry has to shrink healthily, which affects many downstream industries. Especially mechanical engineering.

The May figures were partly driven by large orders. Excluding these significant contracts, new orders still grew by a healthy 1.0% month-on-month. However, economists caution that the overall picture remains challenging. Thomas Gitzel, chief economist at VP Bank, noted that the automotive industry is undergoing a necessary "healthy shrinking," which impacts many downstream industries, particularly mechanical engineering. While mechanical engineering saw positive order intake in May, Gitzel described the broader outlook as "bleak."

“

While mechanical engineering can book positive order intake in May, the overall picture looks bleak.