Staff of Reuters Read for 2 minutes (Adds details, economist, background) (Reuters) – BERLIN, July 6 (Reuters) – Data released on Tuesday revealed that orders for German-made goods fell sharply in May for the first time since the first lockout in 2020, because to weaker demand from nations outside the euro zone and fewer contracts for machinery and intermediate items. Orders for industrial goods declined 3.7 percent month over month in seasonally adjusted terms, according to statistics released by the Federal Statistics Office, marking the first drop in new business this year. This comes after an upwardly revised gain of 1.2 percent in April, which surprised a Reuters projection of a 1% rise. Foreign demand declined by 6.7 percent, with orders from outside the euro zone falling by 9.3 percent, according to the report. Domestic demand increased by 0.9%. The report indicated that demand for capital items, such as machinery and automobiles, declined by 4.6 percent, while orders for intermediate products fell by 3.6 percent. Consumer goods orders increased. According to Thomas Gitzel, an economist at VP bank, the drop indicates that a material scarcity is affecting order intake. “Orders will not be placed at all if companies are unable to complete orders owing to a lack of input materials,” he stated. However, he highlighted that significant pandemic demand for commodities such as furniture and healthcare products – which required German machinery – was likely to be declining and returning to more normal levels. Lockdown restrictions in place since November dampened household spending and created manufacturing bottlenecks, causing the German economy to contract by 1.8 percent in the first quarter. A relaxation of restrictions in the three months leading up to the end of June is expected to have fueled a recovery, and economists are forecasting growth for the summer despite supply bottlenecks crimping growth. (Caroline Copley contributed reporting; Riham Alkousaa and Maria Sheahan edited the piece.)/n
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