Germany’s manufacturing industry is facing challenges in the near future, as indicated by lower-than-expected demand in February. Despite a modest increase of 0.2% in factory orders, this fell short of analysts’ forecasts of 0.8% to 0.7%. The growth was driven by increased demand in the machinery and equipment sector, as well as the chemical and pharmaceutical industries. Despite this slight improvement, experts predict that Germany may enter into another technical recession in the first quarter of 2024.
Germany’s statistics agency reported that, when excluding large-scale orders, new orders were down 2.0% in the period from December 2023 to February 2024. If big orders are included, the quarterly gain was 2.8%. Comparatively, other European countries like France and Spain showed increases in industrial production in February. France saw a 0.9% monthly rise, following a decline in January, while Spain recorded a 0.7% monthly increase.
According to Ralph Solveen, a Commerzbank senior economist, factory order growth turned positive due to a slight increase in large orders. However, excluding these purchases, results showed a decrease of 0.8% on the month. Amidst a challenging economic environment in Europe with high interest rates, Germany’s economy is particularly struggling. The country experienced a 0.3% decrease in both the fourth quarter and the entire year of 2023, making it the worst-performing major economy globally
