German Industrial Orders Rise Strongly in March
German industrial orders increased significantly more than expected in March, marking the second consecutive month of growth after a sharp decline earlier in the year, according to data released by the country’s statistics office on Thursday.
The latest figures suggest that Germany’s manufacturing sector showed renewed strength despite growing geopolitical uncertainty linked to the ongoing Iran conflict.
Factory Orders Beat Market Expectations
Industrial orders rose 5.0% month-on-month on a seasonally and calendar-adjusted basis. The result accelerated sharply from February’s upwardly revised 1.4% increase and easily surpassed market expectations for a 1.0% rise.
The strong reading provided a positive surprise for investors and economists monitoring Europe’s largest economy.
Underlying Demand Reaches Highest Level Since 2023
When excluding highly volatile large-scale orders, new industrial orders climbed 5.1% compared to the previous month.
This marked the highest level of underlying demand recorded since February 2023, signaling broader strength across Germany’s manufacturing sector.
However, the less volatile three-month comparison still showed some weakness.
Including large-scale orders, new orders during the first quarter were 4.1% lower compared with the fourth quarter of last year.
Excluding large-scale orders, industrial demand in the first quarter still managed to post a modest 1.6% increase.
Analysts Warn About Middle East Risks
Despite the stronger-than-expected March data, analysts remain cautious about the outlook for the coming months.
Commerzbank analyst Joerg Kraemer said the increase came as a surprise given that March marked the first month of the Iran war.
However, he warned that business sentiment indicators suggest industrial orders could weaken again during the second quarter as geopolitical uncertainty continues to pressure global markets.
“The war in the Middle East is taking its toll, even if it were to end soon,” Kraemer said.
