German Factory Orders Pick Up Strongly

Germany’s factory orders surged 5.0% mom in March 2026, sharply accelerating from an upwardly revised 1.4% growth in the prior month and easily topping market expectations of a 1% increase. The upturn was boosted by a positive trend in new orders across almost all economic sectors, including electrical equipment (21.5%), data processing equipment, electronic and optical products (14.4%), and mechanical engineering (6.9%). Order intake increased for all components, notably intermediate goods (9.2%), consumer goods (7.3%), and capital goods (2.1%). Foreign orders jumped 5.6%, boosted by demand from the euro area (10.1%) and non-euro area markets (2.7%). In addition, domestic orders grew 4.0%. Excluding large-scale contracts, total orders rose 5.1%, reaching their highest level since February 2023. On a less volatile basis, new orders in Q1 2026 fell 4.1% from the prior period, due to a very high volume of large orders at the end of 2025. Excluding large orders, they increased by 1.6%.

Germany’s factory orders rose 0.9% mom in February 2026, rebounding from an 11.1% slump in the prior month but missing market expectations of a 2% increase. The recovery was driven mainly by the automotive sector, where orders grew (3.8%). Strong gains were also seen in textiles (45.2%) and metal production and processing (3.7%). In contrast, orders in other vehicle manufacturing, including aircraft, ships, trains, and military vehicles, plunged 25.9%. By category, demand increased across capital goods (0.2%), intermediate goods (1.4%), and consumer goods (4.5%). Foreign orders rose (4.7%), led by the euro area (6.7%) and non-euro area markets (3.5%). However, domestic orders fell (4.4%). Excluding large-scale contracts, total orders rose (3.5%). On a less volatile basis, new orders from December 2025 to February 2026 were 2.0% higher than in the previous three-month period. However, excluding large orders, they fell 0.8%.

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.