On Monday, official figures from the German government show that industrial orders have surged in July, hitting a post-reunification high and pointing to a solid start to the second half in the engine room of Europe’s largest economy.
The figures published by the Federal Statistics Office showed orders for goods ‘Made in Germany’ rose by 3.4% on the month in seasonally adjusted terms. A breakup of the data showed that domestic orders fell 2.5% on the month and foreign orders rose by 8.0%.
Although orders from the euro area fell by 4.1%, orders from across the globe rose by 15.7%, mainly due to large orders from the shipbuilding sector.
“The development in Germany is disappointing: the order books are still well filled and the order backlog is high,” said Bastian Hepperle, an economist at Bankhaus Lampe. “Due to a lack of materials and primary products, there are considerable difficulties in processing orders”.
Last week, according to the results of a survey, German manufacturers struggled to meet strong demand for industrial goods in August even as supply shortages of raw materials and components including semiconductors resulting in the production delays pushing up the prices of finished goods.
During the second quarter, German economy activity rebounded posting a growth rate of 1.6% compared to the first quarter following an easing of COVID-19 measures.
The German government expects the economy to grow at 3.5% in 2021 and 3.6% in 2022, though supply bottlenecks and rising COVID-19 cases are likely to add to headwinds.