German Factory Orders Will Record Growth in Q2

German Factory Orders Will Record Growth in Q2


Quotes from Societe Generale Cross Asset Research:
-Factory orders in Germany defied the gloom to show a solid 0.6% mom rise in May. In addition, growth in April was revised to a decline of 1.4% mom from one of 1.9%. Hence, the level of orders in May was about 1% higher than expected.
-That said, the composition was more than a little surprising: all the headline growth came from orders received from other euro area countries, which surged 7.7% mom after a decline of 1.3% in April.
-In contrast, domestic orders were soft, dropping by 1.3% mom after a rise of 0.6% in April and 1.3% in March. Orders from non-euro countries was also weak, recoding the second successive decline of 0.8% after dropping 4.1% in April - this did, however, follow a 6.6% jump in March.
-Beyond the short-term volatility, the trend looks reasonably encouraging: 3-month-on-3-month rates of change for total orders were 2.2% for total orders, 1.3% for domestic and 2.9% for export orders - not exactly in the spirit of the PMIs. It therefore now looks very likely that after three consecutive quarters of declines, factory orders will record growth in Q2.
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