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Economy in Brief

German Industry Relying on Foreign Demand
by Carol Stone May 6, 2004

Factory orders in Germany eased in March by 0.5%, but maintained their relatively high levels of the prior five months and extended a mostly rising trend into an 11th month.

German data are classified according to the origin of the order, domestic or foreign. While both categories are up sharply from a year ago, it is evident in the graph that foreign orders have provided the firmer support to German manufacturing over the past 2-1/2 years. In fact, remarkably, capital goods orders from foreign customers did not experience a yearly decline during the recent recession. Scattered months showed 12-month decreases, but yearly totals rose without exception, albeit only a very little in 2001. Foreign orders for consumer goods were actually strong in 2001 and 2002, although they have trailed off somewhat since then.

The domestic German appetite for manufactured goods is more languid. Even after large increases last September and October, the level of domestic orders in March remains 3% lower than the 2000 base-year level. Consumer orders are the major weakness, as the first quarter this year averaged 86.0, off markedly from last year's average of 90.0. This sluggishness could well be related to a downtrend in employment. Both jobs and job vacancies have also been declining, suggesting that prospects are not particularly favorable for an early upturn in employment and a consequent rebound in domestic demand for manufactured consumer goods.

SA, 2000=100Year/Year %Chg
  Mar/Feb, SA %Chg Mar/Mar NSA %Chg
Mar Feb 2003 2002 2001
Total Orders* 101.7 102.2 -0.5 13.5 0.8 -0.2 -2.0
  Domestic 97.0 97.3 -0.3 12.8 0.0 -3.2 -2.6
  Foreign 107.6 108.3 -0.6 14.3 1.6 3.6 -1.2
               
Capital Goods 104.3 103.6 0.7 15.3 1.2 0.1 -0.9
  Domestic 99.4 100.3 -0.9 15.4 1.4 -3.5 -2.2
  Foreign 108.8 106.7 2.0 15.2 1.1 3.3 0.3
               
Consumer Goods 91.4 93.1 -1.8 10.5 -3.5 -2.6 1.2
  Domestic 84.8 85.6 -0.9 12.4 -4.8 -5.4 -0.3
  Foreign 106.3 110.1 -3.5 11.4 -0.9 3.5 4.6
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