German Factory Orders Rise 1.9% in May

German factory orders grew by 1.9% in May on a seasonally and calendar-adjusted basis, surpassing economist projections of 1.1% to 1.5%. This rebound follows a revised 3.2% decline in April. The Statistisches Bundesamt reported that growth was heavily influenced by an 85% surge in other transport equipment, including aircraft, ships, and military vehicles, though orders still increased by 1.0% when excluding these large-scale items.

Foreign orders rose by 2.2%, led by an 11.2% increase from the euro zone, while domestic orders grew by 1.3%. Analysts suggest the growth stems partly from stockpiling and the relative stability of German supply chains compared to Asian competitors facing disruptions in the Strait of Hormuz.

Despite the figures, economists warn of a cautious outlook. Concerns persist regarding the erosion of competitiveness and downsizing within the mechanical engineering and automotive sectors. While some analysts expect a recovery, they describe it as likely to be moderate given the broader economic pressures facing the nation.