Germany: Order book deflation continues – ING

Carsten Brzeski, chief economist at ING, points out that the German great order book deflation continues with devastating new orders data just undermined any hopes for an industrial rebound.

Key Quotes

“We are starting to lose our optimism. Instead, the order book deflation just reached a new standard. In May, new industrial orders dropped by a painful 2.2% MoM, from a slightly upwardly-revised 0.4% MoM increase in April. After two positive months and hopes for a bottoming out, the downward slide is back again.”

“On the year, new orders were down by 8.6%; the worst YoY drop since 2009. In particular, foreign orders dropped sharply: -5.7% MoM from non-Eurozone countries and -1.7% MoM from Eurozone countries, reflecting continued global uncertainties.”

“After four disappointing months, domestic orders increased by 0.7% MoM. Still, domestic orders have been an even bigger disappointment than foreign orders this year, having dropped by an average of 1.5% MoM since the beginning of the year.”

“Today’s sharp drop in new orders clearly undermines the tentative signs of a rebound or at least a bottoming out at the end of the first quarter.”