New business for German industrial firms climbed in January on strong foreign demand, official data showed Friday, but domestic orders took a hit from fresh coronavirus restrictions.
Orders rose 1.4 per cent month-on-month, federal statistics office Destatis said in seasonally adjusted figures, rebounding from a 2.2 per cent slump in December.Compared with January 2020, new orders were up 2.5 per cent, Destatis said.
Industrial orders are closely watched as a key indicator of future economic activity, especially in manufacturing powerhouse Germany.The month-on-month January increase was driven by a 4.2 per cent jump in new orders from abroad, particularly outside the eurozone, Destatis said.
Within Germany, new orders plunged 2.6 per cent, reflecting the impact of Covid-19 shutdowns that have sapped demand for consumer goods in Europe's top economy.
German industrial orders plummeted during the first wave of the pandemic last March and April before recovering as global lockdowns eased. However a second wave of cases at the end of last year forced renewed restrictions in Germany, with authorities closing non-essential shops and imposing tighter rules on working from home. "Orders in the manufacturing sector resumed their upwards trend in January," the economy ministry said in a statement, singling out strong demand in car production and machine-tool making.But analysts highlighted the growing gap between the domestic side and demand for "made in Germany" goods abroad. "Today's data suggest that the industrial strength will continue in 2021," said ING Diba bank analyst Carsten Brzeski. "While retail sales took a sharp hit in January, industrial orders improved," he added. "It looks as if at least industry seems to benefit from the fact that some countries are faster and more advanced with their vaccination strategy and reopenings than Germany.