In July, orders from German industry increased by 2.8 percent compared to the previous month – less than most observers expected. Domestic orders fell by 10.2 percent – although it has to be said that the June figures were too good to be true. The decline in domestic orders together with a whopping 14.4 percent increase in foreign orders mean that both components are now around 7 percent below the same month last year – a thoroughly realistic picture. The development in the automotive industry is particularly pleasing: Here, an increase in orders of 8.5 percent meant that orders were even slightly up on the previous year. That gives hope for the production data of the auto industry, which will be published on Monday. However, the data from the German Automobile Association for August do not yet show a good picture. There is no sign of any pent-up demand for the months of April / May, when car production actually failed.
All of this fits in with our picture that the German economy has regained a solid foothold after the unprecedented slump – not least thanks to massive government support, including in particular short-time working benefits. From now on, however, it will be much more difficult: Rising numbers of infections around the world are leading to concerns about new anti-pandemic measures in many places and causing producers and consumers to continue to act cautiously. It will be a while before the world is the same again, if at all.
Author: Martin Moryson, Chief Economist Europe
Disclaimer: The text is a column of the DWS. 4investors is not responsible for the content of the column and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!