Seasonal, rather than structural, factors are to blame for the latest disappointing new orders data
German new orders dropped sharly in March, led by particularly disappointing fall in foreign orders (more than 3% MoM). On the year though, and working day adjusted, new orders were still up by 3.5% and domestic orders remained almost stable.
MoM change in new orders
At first glance, these disappointing April data seem to be at odds with buoyant confidence indicators and are anything but a good start to the second quarter. At second glance, however, weak new orders data look like the result of this year’s timing of Easter. No reason to worry. Order books are still richly filled to ensure good production data in the months ahead and earlier episodes have shown that vacation and holiday driven delays will eventually be recovered. It only takes a while.