Lubricating oil for German growth engine is running again. German new orders increased by 3.9% MoM in October, from a 2.4% drop in September. This is the strongest monthly increase since January 2011. On the year, new orders are still down by 2.4%. The increase came from both domestic and foreign orders. Interestingly, even new orders from other Eurozone countries posted their second strongest monthly increase since the beginning of the year (+3.5% MoM).
During the summer months, the German economy’s safety net against the euro crisis had become dangerously thinner. Order books had become smaller and at the same time companies increased their inventories. The negative impact of the summer developments should still be felt in the industrial sector in the coming months. However, today’s increase in new orders indicates that the safety net is stabilising again. At least in Germany, green shoots seem to sprouting during the winter. If this trend continues, the current growth worries for the Eurozone’s biggest economy could turn out to just be a tempest in a teacup.