German factory orders rise 3.1% in June, beating expectations

Germany’s factory orders rose more than expected in June, driven by a strong demand for machinery and electronic products, official data showed on Thursday.

New manufacturing orders increased 3.1% from the previous month, beating market expectations for a 0.5% rise, according to the Federal Statistical Office, Destatis.

Excluding large-scale orders, however, factory orders declined 0.5%, indicating that the headline increase was largely supported by major contracts.

Orders rose 6.5% compared with June last year.

The monthly increase was led by a 22.7% surge in orders for computer, electronic and optical products, and a 12.7% gain in machinery and equipment orders.

Orders in the automotive sector increased 3.8%, while demand for other transport equipment, including aircraft, ships, trains and military vehicles, plunged 41.7% from the previous month’s elevated level.

Capital goods orders rose 6.4% and consumer goods orders increased 4.2%, while intermediate goods orders fell 2.5%.

Domestic orders climbed 7.8%, while foreign orders edged up 0.2%.

Meanwhile, orders from outside the euro area increased 10.2%, offsetting a 14% decline in demand from euro-area countries.

In the April-June period, factory orders were 1.3% higher than in the previous three months. Excluding large-scale orders, they remained unchanged.

Destatis revised the monthly increase for May sharply down to 0.3% from the initially reported 1.9%, citing an amended adjustment for price changes.

Manufacturing turnover fell 1.3% month on month in June and declined 0.4% from a year earlier.