Germany: Solid start into Q2

German manufacturing orders rose in April by 1.4% on the month. If the always very volatile orders in the "other vehicles" sector (aircraft etc.) had not fallen, the increase would even have been one percentage point larger. For now, however, the data is only signalling a stabilisation of industrial production. Order intake needs to continue rising in the coming months if production and thus GDP is to grow more strongly again in Q2.

German manufacturing orders had already posted a month-on-month rise in March. But this was solely attributable to a large plus in orders for aircraft, locomotives etc., which often fluctuate heavily, masking the underlying trend. In April, a notable increase by 2.4% is seen in core orders - i.e. excluding this sector "other vehicles" - for the first time this year, which comes after a steep drop in the three preceding months. 

A particularly sharp rise was seen in orders from abroad, though admittedly these had been particularly weak before. But considering a somewhat longer period, a sideways movement at best in orders from the euro zone as well as in orders from outside the monetary union is seen. The same applies to domestic orders, which excluding "other vehicles" showed a small plus. 

"The marked rise of core orders has, of course, improved prospects for Q2. But the trend of industrial production on the basis of order intake is still pointing slightly downwards. Industrial production may have risen quite sharply in April (forecast: +1.0%). But if the quarter-on-quarter figure is also to come in higher eventually, order intake must continue rising in the coming months", , says Commerzbank.