BERLIN, Jan 8 (Reuters) – German engineering firms reported a boost in orders in November, with a high volume of orders for large-scale facilities from outside the euro zone making up for domestic weakness, the VDMA engineering association said on Thursday.
Overall orders grew for a second month in a row, rising by 7% year on year in November primarily due to a 20% jump in orders from countries outside the euro zone currency bloc.
Foreign orders were up 14% compared with a 9% drop in domestic ones, prompting VDMA chief economist Johannes Gernandt to call for policymakers to match their actions to their words.
“Federal policymakers have a particular responsibility to strengthen domestic demand. We welcome Chancellor Merz’s announcements that stimulating the economy is now a top priority. But words must now be followed by deeds,” he said.
Urgent reforms are needed to ease the burden on small and medium-sized industrial businesses, he said, including lower corporate taxes well before 2028, pension reform, a consistent reduction in bureaucracy and a more flexible labour market.
For the less-volatile three-month period from September to November, companies saw a 3% overall drop in orders, including a 4% fall in those from abroad and a 2% decrease domestically.
“No real momentum in orders is yet foreseeable for the new year that would lead to stronger growth,” said Gernandt.
CHANGE
NOVEMBER
overall +7% y/y
of which German -9% y/y
foreign +14% y/y
-3% y/y
SEPT TO NOV
of which German -4% y/y
foreign -2% y/y
(Reporting by Miranda Murray, Editing by Friederike Heine)
