Orders for new industrial products from Germany dropped

Orders for new industrial products from Germany dropped unexpectedly in May 2021, the steepest since a record fall in April last year. The reason was a reduction in foreign orders. Data from the Federal Statistical Office Destatis showed it on Tuesday. According to the latest statistics, orders in German industry in May 2021 decreased by 3.7 percent compared to April, when after the revision they increased by 1.2 percent month-on-month. At the same time, economists expected it to rise by 1 percent in May. The May drop in orders was the largest since their record fall of 6.7 percent last April, when severe blockades were imposed in many states to stop the new coronavirus pandemic. Statistics also show that domestic orders increased by 0.9 percent in May, while foreign demand, by contrast, fell by 6.7 percent. Of this, new orders from the euro area fell by 2.3 percent and from other countries by 9.3 percent. Year-on-year, orders for German factory products rose 54.3 percent in May after rising 80.2 percent in April. Compared to February 2020, the last month before the introduction of pandemic restrictions, new orders were 6.2 percent higher. At the same time, Destatis reported that real production turnover fell by 0.5 percent in May compared to the previous month, when it fell by 2.5 percent. The German economy contracted 1.8 percent in the first quarter of 2021 as restrictions on movement since November dampened household spending and a shortage of raw materials caused production problems. The easing of restrictions in April-June is expected to support the recovery of the German economy, and economists predict that it will continue to grow in the summer, despite the fact that many companies in the industry face supply chain problems.