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Germany's factory orders declined more-than-expected in March, reflecting the impact of the war in Ukraine on industrial activity.
Factory orders posted a monthly fall of 4.7 percent in March, data released by Destatis showed Thursday. This was faster than February's 0.8 percent decrease and the 1.1 percent decline expected by economists. Excluding major orders, new orders in manufacturing declined 2.2 from February.
The overall fall in demand was largely driven by the 6.7 percent contraction in foreign orders. Domestic orders logged a moderate decrease of 1.8 percent.
Within foreign demand, orders from the non-euro area went down 13.2 percent, while that from the euro area grew 5.6 percent.
Among major segments, orders for capital goods recorded an 8.3 percent fall and that for intermediate goods decreased 1.5 percent. On the other hand, consumer goods demand grew 6.4 percent.
On a yearly basis, new orders slid 3.1 percent, in contrast to the 4.3 percent increase seen in February. German order books were richly filled at the turn of the year but have started to weaken since then, Carsten Brzeski, an ING economist, said. The war in Ukraine and the new supply chain frictions in China will add more pressure to orders and consequently, the entire economy in the coming months.
Data showed that real turnover in manufacturing decreased 5.9 percent on month in March, following a 2.2 percent decrease in February.
