German industrial orders dropped more sharply than expected in January, following a particularly strong performance in December, according to new data released by the federal statistics office. The decline highlights continued volatility in Germany’s manufacturing sector, which remains under pressure from shifting demand and industrial output trends.
On a seasonally and calendar-adjusted basis, industrial orders in Germany fell by 11.1% in January compared with the previous month. The drop was significantly larger than economists’ expectations. A Reuters survey of analysts had predicted a more moderate decline of around 4.5%.
However, the statistics office noted that the fall was much smaller when large-scale orders were excluded. Without these large orders, German industrial demand slipped by only 0.4% in January. This followed December’s surge, when factory orders recorded their strongest increase in two years.
Industrial production also surprised to the downside. Output in Germany’s manufacturing sector declined by 0.5% in January compared with the previous month, contrary to analysts’ expectations of a 1.0% increase.
The decline in production was mainly driven by a sharp drop in fabricated metal products excluding machinery and equipment, which fell by 12.4%. The statistics office also reported lower output in the pharmaceutical industry as well as in the computer, electronic, and optical products sectors, which further weighed on overall industrial activity.
