German Factory Orders Unexpectedly Shrink

Germany’s factory orders slumped 11.1% mom in January 2026, far worse than market expectations for a 4.3% drop, and after a downwardly revised 6.5% rise in the previous month. It was the first decline since August, largely driven by a 39.4% plunge in fabricated metal products after large orders in the prior month created a high base. Demand also weakened for machinery and equipment (-13.5%) and basic metals (-15.1%). In contrast, orders grew for the automotive industry (10.4%) and aircraft, ships, trains, and military vehicles (9.2%). By category, capital goods tumbled 14.1% and intermediate goods fell 7.9%, while consumer goods edged up 0.1%. Domestic demand dropped 16.2%, while foreign orders shrank 7.1%, including a 7.3% fall from the euro area and a 7.1% drop from non-euro area markets. Excluding large contracts, orders slipped 0.4%. Still, factory orders between November 2025 and January 2026 grew 7.4% from the prior three months, or 1.5% higher without large orders.

Germany’s factory orders surged 7.8% month-on-month in December 2025, defying market expectations for a 2.2% drop and accelerating from November’s marginally revised 5.7% gain. It marked the fourth straight monthly increase and the strongest since December 2023, boosted by large orders in metal products (30.2%) and mechanical engineering (11.5%). Notable growth was also recorded in electrical equipment orders (9.8%) and electronic products (5.7%). In contrast, demand fell for aircraft, ships, trains, and military vehicles (- 18.7%), and the automotive industry (-6.3%). By category, capital goods rose 10.5% and intermediate goods 5.7%, while consumer goods declined 5.3%. Domestic demand climbed 10.7%, and foreign orders advanced 5.6%, led by a 9.7% rise from non-euro area markets, offsetting a 0.6% euro area drop. Excluding large contracts, orders edged up 0.9%. On a quarterly basis, factory orders grew 9.5% in Q4, or 2.5% without large contracts.

Germany’s factory orders jumped 5.6% mom in November 2025, beating market estimates for a 1.0% fall and picking up from an upwardly revised 1.6% increase in the prior month. This marked the third straight monthly gain and the strongest pace since December 2024, boosted by large orders in the manufacture of metal products (25.3%) and aircraft, ships, trains, and military vehicles (12.3%). More moderate growth was also recorded in electrical equipment, mechanical engineering and data processing, electronic, and optical products. By category, orders rose across the board, including consumer goods (8.2%), capital goods (7.9%), and intermediate goods (1.0%). Domestic demand jumped 6.5%, while foreign demand increased 4.9%, supported by gains from both the euro area (8.2%) and non-euro area markets (2.9%). Excluding large-scale contracts, orders rose 0.7%. On a three-month basis from September to November, factory orders advanced 4.0%, and excluding large contracts, they increased 1.6%.