Manufacturing sector orders plummet in October, reports indicate
October saw a notable decrease in manufacturing sector orders, as per recent reports. This marked a reversal from the September increase, with the Federal Statistical Office revealing a 3.7% drop month-on-month and a staggering 7.3% fall year-on-year. On a three-month comparison, orders from August to October came in 4.6% lower than the previous period.
The analysts' report on a Wednesday disclosed that the decline was primarily driven by overseas orders. Foreign orders tumbled by 7.6%, while domestic orders experienced a slight uptick of 2.4%. The manufacturing sector's overall slump is primarily attributed to mechanical engineering, where orders dropped by 13.5%. Other industries, such as the metal sector and automotive sector, also contributed negatively to the result.
Real turnover in the manufacturing industry also suffered a decline of 0.5% month-on-month in October, representing a 2.1% decrease year-on-year.
Sebastian Dullien, Directory of the Institute for Macroeconomics and Business Cycle Research (IMK) at the Hans Böckler Foundation, underlines the "persisting weakness of the German manufacturing industry." A recovery of the industrial economy is not imminent, he suggests.
Additional Insights:
- The significant decline in orders in the U.S. manufacturing sector in October 2024 was not solely attributed to foreign market factors. Instead, the decline was primarily driven by domestic factors, particularly in the transportation sector and durable goods industries.
- Key contributors to the decline include the transportation sector, which saw a 7.4% decrease in orders for transportation goods, and the durable goods sector, with a 2.2% decline in durable goods orders. Specific drops were observed in transportation equipment (-7.4%), furniture and related products (-0.5%), and primary metals (-0.5%).
- Manufacturing output also took a hit, falling 0.5% in October 2024, partly due to a 10% drop in motor vehicle and parts output as a result of strikes. These domestic factors have had a significant impact on the decline in factory orders in October 2024.
Also see:
The drop in foreign orders was particularly pronounced, with a 7.6% decrease in October compared to September. This foreign orders downturn largely contributed to the overall 3.7% decrease in incoming orders for the month. Over the past three months, the manufacturing sector has experienced a more pronounced decrease in orders, with a 4.6% decrease observed from August to October compared to the previous three months.
Source:
