Mild rebound. German new orders increased in December on the back of stronger demand from non-Eurozone countries. New orders increased by 1.7% MoM, from -4.9% in November. The increase was driven by foreign demand from countries outside the Eurozone, increasing by 4.3%. At the same time, domestic demand dropped by 1.4% MoM and Eurozone demand declined by some 7% MoM. Looking at the different sectors, both demand for consumer and capital goods increased.
German new orders have been on a rollercoaster ride during the last couple of months, with sharp monthly fluctuations probably due to bulk orders. The high volatility actually masks a trend of stabilisation.
Since the summer, the safety net for the German industry, i.e. high backlogs and low inventories, had somewhat given in under the pressure from the sovereign debt crisis. Today’s numbers confirm that this trend stopped in December. It is too early to call this a rebound. However, there is at least still sufficient demand for goods “made in Germany” to keep the industrial engine running in 2012.