German Factory Orders Plunge 11.3% in January Despite Auto Sector Boost

Bob Mason
Published: Mar 7, 2024, 07:23 GMT+00:00

Key Points:

  • German factory orders fell by 11.3% in January.
  • The automotive industry saw incoming orders increase by 4.2%, bucking a broader trend.
  • ECB interest rate decision and press conference up next.
German Factory Orders

In this article:

On Thursday, the German economy was under the spotlight again after better-than-expected trade data on Wednesday. German factory orders garnered investor interest early in the European session.

German Factory Orders

Factory orders tumbled 11.3% in January after surging 12.0% in December. Economists forecast German factory orders to decline by 6.0%.

According to Destatis,

  • Orders for capital goods slid by 13.1%, with orders for intermediate goods down 9.3%.
  • Consumer goods orders declined by 5.7%.
  • Significantly, orders from overseas were down 11.4%, with orders from the Eurozone tumbling 25.7%.
  • Orders from outside the Eurozone bucked the trend, rising by 1.6%, while domestic orders declined by 11.2%.
  • The automotive industry saw incoming orders increase by 4.2% after falling by 5.8% in December.
  • Orders for the manufacture of electrical equipment (-33.2%), other vehicle construction (-27.3%), and metal products (-14.5%) impacted the headline figure.

German Economic Indicators Sent Mixed Signals

Factory orders reversed course in January, suggesting a slump in demand at the start of Q1 2024. The numbers contrasted with trade data for January. Imports and exports increased by 3.6% and 6.3%, suggesting an improving demand environment. The outlook for the German and Eurozone economies will hinge on the February numbers, which could influence the ECB rate path.

EUR/USD Reaction to the Economic Indicators from Germany

Before the German factory order numbers, the EUR/USD fell to a low of $1.08932 before rising to a high of $1.09073.

In response to the numbers, the EUR/USD fell to a low of $1.08998 before rising to a high of $1.09043.

On Thursday, the EUR/USD was up 0.03% to $1.09023.

EUR/USD has a mixed reaction to German factory orders.
070324 EURUSD 3 Minute Chart

Next Up

On Thursday, the ECB monetary policy decision and press conference are the main event for the EUR/USD. Economists expect the ECB to leave interest rates at 4.5%, placing the ECB press conference under the spotlight.

ECB staff projections and views on the timeline for interest rate cuts need consideration.

From the US economic calendar, US jobless claims and the Fed will draw investor interest. Fed Chair Powell will deliver a second day of testimony, with FOMC member Loretta Mester also on the calendar to speak.


About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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