German orders slip in February in early taste of likely corona impact

(C) Reuters. FILE PHOTO: A German steelmaker ThyssenKrupp worker controls a blast furnace in Duisburg

BERLIN (Reuters) – Orders for German-made goods dropped 1.4% in February, data showed on Monday, as a sharp fall in orders from abroad hinted at the likely impact of the coronavirus on the exporting powerhouse’s economic prospects.

The figures published by the Statistics Office relate to the period before lockdown measures began to affect the German economy in earnest: domestic orders climbed by 1.7%, while orders from abroad shrank by 3.6%.

The overall fall was less than the 2.4% drop expected by analysts polled for Reuters.

But countries like China and Italy were already hard hit by the virus and some lockdown measures put in place in an attempt to suppress it in February.

“The orders data showed that the industrial recession in Germany was over before the outbreak of the pandemic,” the Economy Ministry said as bookings for January were revised to a 4.8% increase.

“Given the global economic shock the pandemic is causing, however, we have to expect major falls in orders for March and April and sharp drops in production in the first and second quarters,” it added.

Contracts from the euro zone were down 5% in February, while those from the rest of the world were down 2.7%.

China is Germany’s biggest trading partner. Manufacturers depend on both demand and supply chains from China.

“Today’s numbers at least show that this first wave of the Covid-19 impact on German industry has been rather benign,” said ING economist Carsten Brezski, adding that the impact would likely be more serious in coming months.