German Industrial Orders Slump Unexpectedly in March

German industrial orders fell significantly more than expected in March, decreasing by 10.7% from the previous month on a seasonally and calendar adjusted basis, the federal statistics office said on Friday.

A Reuters poll of analysts had pointed to a 2.2% decrease.

It marks the largest month-on-month decline since 2020 at the height of the COVID-19 pandemic.

The vehicle construction sector had a particularly strong impact on the result, with incoming orders falling by 47.4% compared with the previous month. There was a large increase in orders in February that failed to materialise a month later, the office said.

“After three increases in a row, new orders literally collapsed in March, thus resumed their downward trend,” Commerzbank’s chief economist Joerg Kraemer said.

“Increasing risks for the export-oriented German industry come from the global interest rate hikes. In addition, the impetus from working off orders that had been stuck due to a lack of materials is waning,” Kraemer added.

Foreign orders fell by 13.3% from the previous month while domestic orders decreased by 6.8%.