German factory orders fall again in March, production likely to fall further in spring

German manufacturing incoming orders disappointed again, coming below expectations in March. Factory orders dropped 0.9 percent sequentially, with the softness coming especially from abroad. This signifies that the economic downturn hinted by the confidence indicators is increasingly also reflected in the “hard figures”.

Excluding the always very volatile orders from the “other vehicles” sector, factory order fell 1 percent. Domestic orders even rose slightly, but orders both from the euro area and from outside the euro area continued the downward trend of recent months.

The economic softness, which had been reflected in the sentiment indicators for some time now, is therefore increasingly reflected in the “hard figures”, too. It is true that production in manufacturing is expected to have risen slightly in March compared with the earlier month, noted Commerzbank in a research report. The industry’s sales, which correlate solidly with these figures, grew 0.4 percent.

But this is expected to be mainly a countermove to the February values, which have been slightly distorted downwards by some special effects such as the warning strikes in the metal industry. But, given the recent weak order intake productions is expected to fall further in spring.

“As a result, the underlying growth of the economy as a whole is also likely to lag noticeably behind the high momentum of the previous year”, added ANZ.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bearish at -145.692, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -36.3405. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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