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Germany’s factories bounced back from their worst monthly performance since 2008 in February, reporting a 3.4 per cent increase in orders.
The expansion partially erases the steep and unexpected 6.8 per cent contraction reported at the start of the year but came in below a forecast of around 3.5 per cent growth. Year on year orders were still comfortably in expansionary territory, up 4.6 per cent in a usually volatile set of numbers.
Despite the January blip, Germany’s growth driving manufacturing sector is in its best health since the eurozone debt crisis in 2011, according to an influential survey from Markit.
Factories are being powered along by robust domestic and international demand for their wares in a brightening world and European economy in 2017.
Stats office Destatis said the February growth was driven almost exclusively by domestic demand, which accelerated 8.1 per cent, with orders from eurozone countries still contracting 2.4 per cent and wider international orders stagnant.
Carsten Brzeski at ING said factory orders have become “extremely moody” since the summer “reacting sensitively to seasonal and weather moods”.
“New orders have always been volatile but the fluctuations and size of volatility since late-summer have been almost unprecedented”, said Mr Brzeski.
Chart via Bloomberg