Orders rose 3.1 per cent in the headline and fell 0.5 per cent once large orders are set aside

Two measures, two directions

Real new orders in German manufacturing rose 3.1 per cent in June on the previous month. When the Statistisches Bundesamt excludes large-scale orders from the same dataset, the measure falls 0.5 per cent. The distance between those two numbers describes how many contracts the increase depends on, rather than how many factories it reached.^[1]

A third line completes the picture: in the Statistisches Bundesamt data, manufacturing turnover fell 1.3 per cent on May. The order book and the invoices actually issued moved in opposite directions within the same month. An order becomes revenue when it is produced and delivered, so the rise in orders measures future demand while the fall in turnover measures current output.^[1]

Where the demand came from

The breakdown shows the increase resting on a narrow base. Domestic orders rose 7.8 per cent while foreign orders managed 0.2 per cent; orders from the euro area fell 14.0 per cent and orders from outside it rose 10.2 per cent. By product group, capital goods rose 6.4 per cent and consumer goods 4.2 per cent, while intermediate goods fell 2.5 per cent.^[1]

The fall in intermediate goods carries particular information. Intermediate goods are bought as inputs into another firm's production plan, so demand in that category indicates how much work the next stage of the chain expects. The Statistisches Bundesamt sector detail points the same way: machinery and equipment rose 12.7 per cent and computer and electronic products 22.7 per cent, while other transport equipment fell 41.7 per cent.^[1]

The May revision and the thickness of the signal

The same release also corrected the previous month: the May increase was pulled down to 0.3 per cent from the 1.9 per cent first reported. In the less volatile three-month comparison, April to June sits 1.3 per cent above the preceding three months, and unchanged once large orders are excluded. The Statistisches Bundesamt gives the year-on-year increase as 6.5 per cent.^[1]

Together these three measures describe effective demand concentrating rather than broadening: a handful of large contracts carry the headline while the wide book stands still or shrinks. The strongest objection is that large orders arrive irregularly by nature, and in the Statistisches Bundesamt table the 41.7 per cent fall in other transport equipment shows the same irregularity working in reverse, so a single month's exclusion should not be read too firmly. The July data will test this: if the measure excluding large orders and manufacturing turnover turn the same way, demand is broadening, and if they stay opposed, the concentration continues.^[1]